Marketplace Insurance: What Is It and How It Works?

Study insurance offers from different vendors, choose the appropriate coverage and apply for a health plan on one site – all this can be done with insurance marketplaces. The marketplace ensures equal access to a wide range of products and allows users to remotely sign an agreement with an insurer. Customers can compare prices and services of different vendors and receive their insurance policies without leaving their homes.

How does the Insurance Marketplace Work?

An insurance marketplace is a gateway that links individuals, families, and small businesses with companies offering different health coverage plans. The goal of such a marketplace is to ease data exchange, automate customer acquisition, underwriting and claims management. With a marketplace, individuals can compare prices of different providers and purchase a plan from a suitable vendor. You select a plan and purchase a monthly premium. The vendor covers your healthcare costs, partially or in full, based on details specified in the  plan.

The marketplace website provides the client not only with an online storefront and payment options, but also with the ability to set up a filter according to the necessary parameters — for example, set a range of insurance costs or   insurer rating. 

How Online Marketplace Insurance Differs from Medicare

Medicare is the national health insurance for people aged 65 y.o. and older. In most cases, it is unavailable for youngsters who have to apply for a health plan on a marketplace.

All Flavors of Insurance Plans

In the US, people under 65 y.o. but older than 30 y.o. choose among the following plans:

Types of plans

1. Platinum will cover up to 90% of your medical costs; your payment will be 10%
2. Gold: will cover up to 80%; your payment is 20%
3. Silver: will cover 70%; your payment is 30%
4. Bronze: will cover 60%; your payment will be 40%

There is a plan for people under 30 y.o: Catastrophic. You’re paid out after reaching the highest deductible (in 2022, it was equal to $8,700 in 2022). The scope of the plan includes three primary care visits and a preventive care appointment provided for free.

Insurance Marketplaces in the US

In the US, the insurance marketplace became the main element of the Affordable Care Act introduced by Barack Obama in 2010 to raise accessibility to health insurance among Americans. The  law obliges states to have a marketplace for trading health care plans. Each state may have its own marketplace. Below are some state official marketplaces:

1. New Jersey Marketplace

2. Colorado

3. Florida

4. Ohio

5. Texas

If a state chooses not to have a dedicated marketplace, it joins the federal exchange. 

Nowadays, the US market counts more than 2k life insurance companies, and 8k property insurance companies, either joint stock or mutual insurance. Marketplaces provide three types of insurance: 

1. Property
2. Commercial 
3. Personal

Here is the top five insurance marketplaces in the US:

1. Blue Cross Blue Shield Pros. It offers all the essential insurance plans plus dental. The marketplace provides virtual assistance. There are 34 local companies on the market. 
2. Oscar. The marketplace offers cheap silver and bronze plans and most health management programs. Free tele visits are also available here. There is no dental coverage on the marketplace.
3. Kaiser Permanente. You can book a virtual appointment on the site, phone and video. There is a choice of dental insurance for children on some plans. It has a top rating on healthcare.gov for service quality.
4. Aetna CVS Health. You have a great choice of plan types. Members can benefit from video calls. But there is no dental coverage on the marketplace, and the healthcare.gov gives a medium rating (3.37 out of 5) to this company.
5. UnitedHealthCare. There are multiple plans with dental care available on some plans. But premiums are higher than market average. The customer satisfaction rating is low. 

Insurance Marketplaces Worldwide

Let’s see the best examples around the globe.

United Kingdom

In the UK, personal insurance is provided by insurance brokers, pension funds and investment companies. During the last ten years, more and more people acquire insurance plans instead of using standard medicare which is more likely due to amendments in pension legislation. The insurance areas include: 

• Property 
• Automobile
• Marine 
• Aviation
• Short term insurance

There are more than 400 UK-based insurance companies now. Below is the top five companies:

1. Admiral Insurance: a part of the Admiral Group providing home, travel, motor, pet and finance insurance.
2. AXA UK: French-origin company offering insurance including household, automobile, travel and business.
3. Age Co: a commercial branch of the charity Age UK, that provides insurance products and financial services including car, home and travel.
4. AIG or American International Group, is a multinational company offering life insurance, including coverage of critical illnesses, and business insurance.
5. Allianz: an international company providing financial and insurance services.

Australia

The Insurance industry in Australia can be divided into three categories: life, health, and general insurance. Major insurers specialize in a certain insurance category only. However, a new trend is to provide more general services. Here is the top five insurance companies operating in Australia:

1. Australian Associated Motor Insurers Limited: general insurance provider offering car, home, CTP and business insurance
2. AMP: Car insurance, home insurance,
3. AXA: As compared to the UK subdivision, this multinational company is more famous for travel and commercial insurance in Australia
4. Bingle Insurance: is known for the affordable car insurance
5. Budget Direct: Australian firm for car and general insurance 

Germany

The German insurance market develops dynamically. Premiums increase by 10% year over year. The insurance is provided according to the following types:

• Personal: makes up 37% of the market
• Medical: accounts for 12% of all insurance premiums
• Property: is 51% of the German insurance market.

Here is a list of top 5 insurance companies in Germany:

1. Generali Deutschland: the biggest insurer in Germany offering car, home, health, life, business and finance services. 
2. Allianz: a world-wide insurer which is popular in Germany. It offers private, business insurance and asset management
3. ARAG Group: is widespread in the EC countries. It provides business, life and health insurance.
4. ERGO Insurance Group: operates in +30 countries and offers life, health, home, car insurance together with the business insurance solutions and financial services. 
5. Hannover Re Group: a reinsurance firm providing life and non-life reinsurance, financial services and business consultancy.

India

India is rated as the 11th global insurance country. There are 24 life insurers now where 1 company is the government undertaking while the other 23 are either joint ventures or private companies. Below we put together a list of top five insurance brokers:

1. Life Insurance Corporation of India (LIC): the state owned company offering a variety of insurance plans including money back, endowment, pension, children plans and more. Claim settlement is equal to 98%.
2. ICICI Prudential Life Insurance: is considered as the first private insurer in India. It provides all-kind of insurance with the settlement ratio equal to 96%. 
3. SBI Life Insurance: a JVC of State Bank of India and the French financial company BNP Paribas. The company provides various life insurance plans with the ‘SBI Life Saral Pension’ and ‘SBI Life Shubh Nivesh’ most popular plans. The claim settlement is more than 95%.
4. HDFC Standard Life Insurance: private company which is best known for health claim settlement. 
5. Max Life Insurance: insurance network with over 200 branches. The most demanded plan is the Max Life Smart Secure Plus term plan, the only plan offering added advantages of life insurance

Final thoughts

We have compiled a list of world-known names in the insurance industry to help you explore potential features for your marketplace ecommerce insurance platform. You can surf them on the web and assemble an example for your future marketplace or just scroll the list of the most common marketplace features below. This is a tentative list of what can be introduced in your insurance marketplace:

• Claim management. A special form for a customer to open a claim management dialog with a vendor and keep track of all resolutions in one window
• Artificial intelligence system integration to analyze client behavior and recommend the best  insurance product
• Extended filters to find the  information across meaningful resources on the website
• Push up notifications to keep clients always informed about your brand inventory updates or news
• Virtual appointment via an online calendar to arrange a call with your company rep
• Chatbot integration to respond quickly and retain more prospects on your site
• Virtual consultations to allow insurance vendors spread their expertise with clients while they stay at home
• Feature-rich dashboards for vendors with all-kind settings allowing adding more insurance and vendor types (consulting or insurance companies, legal or finance consultants).

Launch Health Insurance Marketplace with Simtech Development

We at Simtech Development thoroughly examine the customer requirements to design the architecture of the future health insurance marketplace, develop it using the most suitable stack (either a ready-made platform with improvements or from scratch), test and host it on a server. The only thing you’ll need to do is to contact our consultant and convey your requirements.

FAQ

Disclaimer: below are the answers to questions for the US only.