The "personalization economy" has had a transformative effect on every industry, including insurance. As more consumers demand customization from all their transactional experiences with favorite brands, insurance carriers are being pressed to offer unique programs and plans. Fortunately, focusing on serving affinity groups helps carriers meet and exceed member expectations and has a broad and positive ripple effect on bigger communities.
The Rise of Affinity Groups
Affinity groups have been a part of insurance for a long time. Yet they are increasingly gaining momentum in tandem with consumers' growing preference for highly personalized solutions.
What makes affinity group programs so valuable is the basis of their creation. In business, an affinity group is a collection of individuals who share interests, characteristics or affiliations. Consequently, an affinity group's members tend to have common challenges. Insurance packages and complementary resources designed to address those challenges can give members the exact security and protection they need.
The effectiveness of affinity group programs is exemplified by the American Medical Association's (AMA) recent initiative that provides unique insurance options specifically for medical students. In my roles as the president of the Professional Insurance Marketing Association (PIMA) and the president of AMA Insurance, I have had the privilege of overseeing the development of various affinity group insurance programs, including this program designed to meet the unique needs of medical students.
Why target medical students, though? The answer goes back to conversations the AMA was having through their House of Delegates. The House of Delegates is a body whose mission is to advocate and bring forth ideas for physicians and physicians in training. Though physicians had access to disability insurance through the AMA's insurance packages, medical students didn't. There was a big gap because becoming disabled can be financially and emotionally devastating for medical students.
According to statistics from a 2023 University of Pennsylvania study, having a disability can reduce a physician's salary by more than 20%. That's significant on its own, but for medical students shouldering student loan debt and other financial obligations, it can lead to personal and fiscal crises.
As a result, the AMA decided to view medical students as an affinity group and find carriers that could provide a custom disability insurance product for them. It took time but came to fruition. The insurance offerings included a unique student loan payoff provision and preventative tools and resources to help students stay in school. These features helped AMA enhance the plan and make it even more practical and customized for medical students. Consequently, medical schools that opted for disability insurance were also tapping into these prevention-based wellness programs for their students.
This one-of-a-kind support for medical students had a macro impact that can't be overstated. By giving medical students tools to prevent and handle disabilities, the AMA enabled them to move forward more confidently to become practicing physicians and extend their knowledge, compassion and skills to countless patients.
See also: How Parametric Insurance Fills in Gaps
Key Insights From Healthcare-Related Affinity Groups
There were several factors and trends that arose throughout the medical student affinity group experience. The first was that personalized insurance solutions greatly appealed to the end users. Consequently, it is critical to have a deep understanding of the target affinity group audiences. From this understanding, you can more easily seek out partner carriers and options.
For instance, the AMA considered the mental health aspects of becoming disabled as part of our mission. In the demanding world of healthcare, addressing and protecting physicians' well-being is vital for their ability to deliver high-quality patient care. Recognizing this crucial need, the Accreditation Council for Graduate Medical Education (ACGME) established new requirements in 2017 to prioritize and promote the well-being of residents, fellows and faculty members. The AMA began providing students and residents with preventative programs and resources.
A second insight from the medical student affinity group was the importance of technology in insurance. Technology is changing how carriers can be found, and quotes can be produced. Technology also makes the consumer experience more streamlined and personal, such as with mobile apps and texting capabilities. Consumers no longer have to accept cookie-cutter engagements with carriers. Those who become part of affinity groups can avail themselves of services designed and customized for them.
A final insight is that cost is still a barrier. It's hard to get organizations and even end users to pay for insurance, even when it's delivered in a personalized, affinity group-directed way. This is where more education is needed on the true context and benefits of affinity group insurance programs. Affinity group packages aren't limited to offering discounts, lower premiums or accessibility. On the contrary, they can improve the health, welfare and stability of entire communities.
See also: Insurance's New Math
Looking Beyond Physician Affinity Groups
The medical student disability insurance example illustrates a use case for how leveraging affinity groups can have sweeping outcomes. Yet affinity groups aren't limited to healthcare professional insurance or medicine alone; their application is more universal. Coverage for members of any affinity group can leave a lasting mark on communities around the world.
Although it can take time and energy to identify and advocate for affinity groups in the insurance realm, it can be a worthwhile venture. It can also open doors for insurance carriers to build trust with consumers who may not have been exposed to those carriers' brands or product lines. The affinity group members get the insurance to support them and their families, and the carriers get to expand their reach and influence.
In the future, we expect to see affinity group programs evolve and become more commonplace. This exciting evolution has the potential to make inroads for individuals and families across the nation. All it takes is a willingness to think beyond the status quo and begin leaning into the power — and possibilities — of hyper-personalized insurance solutions from affinity groups.
