I refer to Christine Seib's interesting article (Comment, 7 September), concerning the apparent business scoop originally reported in the Sun, that Tesco is in talks to launch a range of private medical insurance products.
While I agree with many of Christine's comments and admit to some cynicism concerning the overall intentions of organisations coming in to such sensitive product areas, I do not think this necessarily means promoting healthcare insurance products will not be another success for an organisation that has become the benchmark for successful affinity marketing.
First of all, Christine quite rightly points to the genius of the Tesco Clubcard, giving Tesco significant insight into the demographics and lifestyle of its 10 million members. On this basis, what is to stop Tesco doing a similar profiling exercise, specifically for healthcare insurance products? From some very basic demographics needed to construct different types of product, to perhaps something more ambitious, based on healthy living and healthy lifestyle, all this information is now available through its loyalty scheme.
It wouldn't be difficult to put a red line through customer segments stacking their trolleys high with the latest wine of the month, or to avoid targeting heavy smokers. Conversely, all those buying isotonic drinks and low-fat foods could receive a nice incentive.
Tesco may never go to such extremes, but we have already seen the launch of Prudential's lifestyle-based healthcare insurance, so perhaps the idea is not too far fetched.
Slightly more seriously, one thing that supermarkets have done for the insurance industry is to generate transparency, better levels of customer service and a general doing away with the gobbledegook that often pervades our industry. Any brand tracking will tell you how much more your average supermarket is appreciated over your average insurance company and if anyone is going to enliven the relatively moribund healthcare insurance sector, it is an organisation like Tesco.
Finally, do not underestimate the power of these brands to change the way in which people perceive the buying of insurance products. Of course, some products need more care than others, but Tesco coming into the market could be just the shot in the arm that this sector needs.
Whatever its motives, the giant affinity brands, such as Tesco, help to keep us on our toes and it will not surprise this correspondent to see another of the insurance industry's sacred cows staring out from a Tesco's shelf.
Bob Hand
Managing director
Affinity Solutions
