BCBS of Florida Enters the Retail Market

Looking to capitalize on the emerging trend of individually purchased health insurance, Blue Cross and Blue Shield of Florida (BCBSF; $7.47 billion in total revenue) is selling its products directly to consumers through carrier-operated retail stores, branded Florida Blue. According to BCBSF spokeswoman Valerie Rubin, the business driver behind the Florida Blue initiative is a larger "retail transformation" of the carrier as the insurance industry becomes increasingly customer-centric.

The first Florida Blue store opened in Jacksonvillle, Fla.'s St. Johns Town Center Mall in February 2007. As of press time, a second retail store was set to open in Pembroke Pines, Fla.

BCBSF director of retail store development Tricia Engel says that many customers prefer the retail model when making health insurance decisions. "There is a segment of the customer base that wants that face-to-face interaction when they are purchasing a service or a policy," she asserts. "We want to provide those customers with choice in how they deal with us."

The early results are encouraging. Engel says store traffic and sales performance numbers have exceeded expectations, although she declines to share specifics. Further, the Jacksonvillle-based carrier has seen interest in the store from all demographics. "We've been surprised that it is across the board," Engel says. "We originally thought we'd have a certain demographic" - seniors - "that would be more interested in the store. But ... we've had people from all demographics come in."

From a technology standpoint, the goal was to enable customers to select, purchase and enroll in a new policy on the spot. "We are ... trying to provide customers with a very retail-like experience," Engel explains. "That means we need fast and simple transactions."

To support that mission, Engel says, an e-application was developed in-house specifically for the stores. Operating on a vitual private network (VPN) with encryption processes, Florida Blue representatives can fill out the application with customers in the store and send it back to BCBSF headquarters electronically for immediate processing, according to Engel.

Infrastructure was developed behind that application for underwriting and sales tracking, leveraging the carrier's existing deployment of Redwood Shores, Calif.-based Oracle's Siebel CRM software, Engel adds. She notes that the stores also can service existing customers, as Florida Blue representatives can log into the company's corporate infrastructure and service capabilities from the retail locations. Most of the functionality accessible in the store is the result of modifying existing capabilities within the enterprise, Engel and Rubin say. The e-application, for instance - known internally as AccessBlue - is available directly to consumers via the BCBSF Web site. "We've modified everything we have, including things that are out there on our Web site, to speed up the process within the store," Rubin relates.

Speed and Security

Engel points out that speed was a focus for the retail stores. BCBSF even changed some of its processing procedures to facilitate the retail experience. The key change, Engel explains, is that the underwriting department immediately begins processing applications submitted via the stores. "That's very different than what we do in our other channels," she says. Meanwhile, the carrier had to secure customer information. In addition to encryption technologies, that meant designing the stores to provide customers with privacy while maintaining the "open environment" design aesthetic, according to Engel. "Part of the physical design and technology design [of the retail stores] is that we have controls in place that while the customer can share information and see everything on our computer screens with a team member, they're comfortable that it's not going to be shared elsewhere," she says.

Engel says that providing the option of obtaining coverage in a retail setting differentiates BCBSF in the individual purchaser health insurance market. "Customers want ... to understand what product options are out there," she explains. "A lot of customers prefer that one-on-one conversation to really understand what they're purchasing."