The web broker says the shift to home-based sales improved
productivity.
Executives at eHealth Inc., a health insurance
broker, say COVID-19-related work-at-home rules may help the company develop a
more productive sales force.
The Santa Clara, California-based company was
one of the first U.S. companies to sell health insurance online. It has been
selling Medicare plans, individual and family major medical insurance, and
supplemental policies through the web, through its own agents, and through
outside agents.
Scott Flanders, eHealth’s chief
executive officer, said Thursday that eHealth has found that its own, career
agents convert more prospects into customers than external agents do; that
shifting the career agents to working at home further increased the career
agents’ productivity; and that second-year agents have about a 30% higher
prospect conversion rate than first-year agents do.
Resources
The company now gets about 90% of its revenue
from selling Medicare plans, and the rest from selling individual and family
major medical coverage, small-group plans, and supplemental coverage.
The main selling seasons for Medicare plans
and individual and family major medical coverage run from mid-fall to
mid-wnter.
Traditionally, eHealth has hired and trained
many of its new agents in the summer, and it has lost many of the agents at the
end of the main enrollment periods.
Because of the currrent high levels of
unemployment, “I do think we will get a higher caliber of agent this summer
than we did last summer,” Flanders said.
Flanders said eHealth measures recruit quality
by looking at the rate at which new agents pass licensing exams.
The company is also expecting a lower level of
agent turnover this year Flanders said.
“That will reduce our recruiting and training
expenses, and give us more seasoned agents going into the fall,” Flanders said.
One reason that eHealth can now hire more of
its own internal agents is that it now can have the internal agents work at
home, in any location, rather than having the agents come into an eHealth
office, Flanders said.
“Deploying home-based agents opens up new
geographies for our talent aquisition,” Flanders said.
Earnings
EHealth held the conference call to go over
first-quarter earnings with securities analysts.
The company is reporting $3.5 million in net
income for the quarter on $106 million in revenue, compared wth a $5.2 million
loss on $69 million in revenue for the first quarter of 2019.
Here’s what happened between the first quarter
of 2019 and the latest quarter to total membership for certain types of
coverage:
·
Medicare Advantage
plans: 404,262 (up 44%)
·
Medicare supplement
insurance: 97,527 (up 27%)
·
Medicare Part D drug
coverage: 224,154 (up 53%)
·
Individual and family
major medical coverage: 113,483 (down 13%)
·
Short-term health
insurance: 23,553 (flat)
·
Dental: 23,260
(down 10%)
Tim Hannan, eHealth’s chief revenue officer,
said during the analyst call that the current economic turmoil could help the
company with marketing as well as with recruiting agents.
The turmoil has caused many other advertisers
to pull back and make inventory cheaper, Hannan said.
EHealth is now looking at the idea of
investing more in advertising through Facebook, YouTube and television.
“We are looking at making investments in these
places to learn whether they would be viable for us going forward, and at what
price,” Hannan said.
The Competition
Flanders, eHealth’s CEO, said he believes
eHealth will do well with Medicare plan sales in the fall, partly because he
has heard that field agents are struggling to book in-person appointments with
older consumers.
“It just stands to reason that trend will
continue,” Flanders said.
That should help online and telephone call
center sales, Flanders said.
Allison Bell, ThinkAdvisor's insurance editor, previously
was LifeHealthPro's health insurance editor. She has a bachelor's degree in
economics from Washington University in St. Louis and a master's degree in
journalism from the Medill School of Journalism at Northwestern University. She
can be reached at abell@alm.com or on Twitter at @Think_Allison.
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