In 2002, Thomas Peluso switched from a job selling tires to one opening checking and savings accounts.
Now Peluso is drawing on his decade-long background in banking to help another industry that is casting a wide net for retail experience: health insurance.
Since December, the one-time branch manager has been working in an upscale shopping plaza in Allentown, Pa., overseeing a 6,700-square-foot store selling insurance policies for Capital BlueCross.
"My goal here is to try to acquire traffic inside the store, and it's one person at a time," Peluso says.
For decades, health insurers sold their products one employer at a time. Now, Capital Blue, of Harrisburg, Pa., and others around the country are jockeying to persuade individuals directly to plunk down hundreds of dollars a month on products they may not fully understand or know how to use. Banking is one of the industries that insurers are turning to for ideas on how to move forward.
"I'm talking to more and more people who are in health care who have come from financial services or other retail industries," says Vaughn Kauffman, a health care industry consultant at PwC.
The change is evident in the language. Banks, for example, have long talked about the lifetime value of a consumer, tallying all of the services a loyal customer might use over time, Kauffman says. In health care, "I think we're starting to see some of that same vernacular now: What's my consumer lifetime value from a health perspective?"
Like banks, health insurers will need to hook people on multiple products, making it harder to switch policies, consultants say. A more engaged customer also is expected to be a healthier customer, driving down medical costs for customers and insurers alike.
"That retail center can be that platform for promoting anything else that they have," says Marc Pierce, president of StoneGate Advisors, a Chicago consulting firm that advises health plans on retail strategy. Capital Blue is a client.
The sales pitch will intensify in October, as online exchanges authorized by federal law go live, promising to make it easier than ever to shop for health insurance. After wrestling with their choices online, consumers may seek face-to-face help. Retail stores are among the places insurers hope they'll go.
They'll find Capital Blue at The Promenade Shops at Saucon Valley, next door to Lucky Brand Jeans and across the street from Banana Republic. The store, which opened in December, has a welcome desk, private offices, exercise space, a cafÃ©, and a colorful children's area with iPads and Wii games. The 12-person staff hosts a roster of events designed to draw curious visitors: fitness classes, wellness seminars and art openings, among others. By May, the store was averaging three insurance applications per day, up from 2.3 in March, Peluso says.
The emphasis, however, is on service after the sale, says David Skerpon, vice president of retail strategies and brand management for Capital Blue. A former banker who worked at Commerce Bank and Mellon Bank in Pennsylvania, he joined the insurer in 2007.
"Just as banks offer a variety of products and services, at the end of the day, they pretty much offer the same vehicle," Skerpon says. "Health insurance is going to have a lot of competition, a lot of the same products, but what's really going to differentiate us is the level of service."
The Capital Blue store is one of more than 40 stores like it nationwide. Others have been opened by Florida Blue, Pennsylvania-based Highmark and New York-based United Health Group. This fall, insurers also are expected to unveil pop-up stores and other temporary outlets.
The industry is still learning the art of site selection, though. Blue Shield of California opened a health insurance store a year and a half agoa first for both the company and the stateonly to close it in April, citing a lack of customers.
Blue Shield believes the locationinside a supermarketwas a contributing factor in the disappointing performance. It has not given up on the idea of stores and expects to try again, using what it learned from the 17-month pilot.
Like banks, insurers also struggle with finding the right staff, consultants say.
While banking and insurance are both heavily regulated, insurance is often more complicated. An HRA, for example, can refer to a health reimbursement account or a health risk assessment.
One of the industry's goals is to make buying insurance simpler, kind of like financial products, says Joseph Albano, vice president of consumer and senior markets at Horizon Blue Cross Blue Shield of New Jersey, which opened a retail store in Moorestown, N.J., in September.
"If you don't demystify this a little bit, people will tend to rely on old ways of doing things," he says. "And in the health insurance marketplace, some of those old ways of doing things are changing."
And that's a situation bankers definitely know something about.