CBHS has been successful for a long time; we have consistently delivered value to our members by way of great benefits for competitive prices, we have regularly led the market on our payout ratio, we have been among the leanest operations in terms of management expense and yet we have excelled in member satisfaction.
We have achieved an annual growth of 4.3% in member numbers to 83,289 and paid out, in claims benefits, over 92 cents in every dollar of premiums paid. Proof that we give back more to our members. We are able to sustain this level of member benefit by virtue of a lean management expense ratio in 2014 of just 6.7% and a target underwriting margin of just 1.75%; meaning that members are not paying for shareholder dividends.
Meeting challenges head-on
At CBHS, we will embrace any reforms that provide the industry with improved opportunities and we are well placed to deal with any hurdles as they occur. To do this, we will continue to rely on our excellent people, processes, systems and partners.
With a backdrop of impending change, our focus this year has centred on two themes: implementing and consolidating our current strategic initiatives, and identification of opportunities which will ensure we thrive rather than just survive in this new environment. As a result, we will be focusing on the following:
- Improving member service. Our members remain our core focus and to further improve the services we offer, we are increasing self-service functionality, lowering waiting times and enhancing our health and well-being activities, providing hospital substitute services and chronic disease management programs.
- Increasing productivity. While we have always been a lean operation and have kept our operating costs low, we have identified opportunities for increasing productivity through automation and process re-engineering.
- Enhancing product development. Affordability continues to be a major issue for our members; we are finding there is a greater demand for lower cost/lower benefit products. We believe an opportunity exists for us to create products that compete at the lower-price end of the value spectrum while continuing to improve our top end products.
- Expanding distribution. While we are committed to servicing the Commonwealth Bank Group through our traditional channels, we will seek to further expand our distribution capacity through the use of aggregators such as Compare The Market.
- Social media opportunities. Over the past 12 months, we have become very active on social media. This medium allows us to expand our reach and to benefit from its immediacy.
- Reducing claims leakage. Claims leakage, arising from member or provider abuse through incorrect claiming or billing, results in premium rises for all members. We are increasing our investment in claims assessment tools and processes, which will help us identify errors and prevent fraudulent activities.
Building upon our member focus
In the current economic climate, members are increasingly focusing on the value of the service offerings from their health funds. So, while we have elevated our strategic focus in order to remain competitive and sustainable it is crucial that CBHS does not lose sight of its key differentiator and purpose, which is to provide the best benefits at the lowest price via the best possible service to our members.
As a mutual health fund, owned by its members, CBHS strives for, and takes great pride in achieving excellence in member service. In late 2013, we introduced a tool called “Net Promoter Score”, which measures a member’s satisfaction levels with the service they have received from CBHS and with CBHS overall. We are delighted to be consistently scoring at around 70 in an industry where our larger competitors are scoring significantly lower levels. Our high levels of satisfaction is also evidenced by being awarded the Roy Morgan Customer Satisfaction Award for seven out of the eight months of 2014.
This year, we will launch a new website which introduces an updated look and feel consistent with our brand. We will be continuing to improve this website with more options for members to complete transactions at their own convenience rather than needing to directly contact CBHS. We have also adopted a new tagline: “We’re Family” to reflect our family-like focus. This follows extensive member research during 2013, where we identified one of the most valued attributes of CBHS is the exclusive, family-like nature of our membership. The “We’re Family” tagline is now incorporated into our refreshed brand image, which is being rolled out from late 2014 through to early 2015.