Time to Look at Competition in the Insurance Industry
Larry Haverkamp wrote an article in the Business Times a few days ago about the sorry state of competition in the insurance industry where companies compete on costs rather than price.
Time to look at competition in the insurance industry
This has drawn a rebuttal from MAS:
Response to “Time to look at competition in the insurance industry” (BT-16 June 2010)
I agree with Larry that it is very difficult to compare health insurance as most of them come with different features. A better approach would be to look at what you really need and find a plan that suits your main concerns instead of trying to see “which plan is better”. Because there is really no absolute answer. And some of the features or premiums may change before you even know it.
But I think there is definitely price competition for certain kinds of simple insurance plans. For example, the pricing for a simple term policy can differ by up to 30% depending on which insurer you go to. Some people might prefer to pay a bit more for a brand name, others might go for affordability as their main criteria.
Some insurers who can’t compete on price try to add in a few extra features to justify for their higher premiums.
At the end of the day, consumers can always choose to DIY and compare all these themselves, or rely on an independent adviser to navigate this maze for them.