Writing in today's Wall Street Journal (subscribers link), Matthew Collier and Lisa Walsh say that individual policies are the next frontier in insurance.

The percentage of employers offering insurance to their companies has declined from 66% in 1999 to 60% last year, say the authors who are partners with Bain & Co. This, they say, means that the group market isn't such a great market any more. The number of small companies and part-time employees has increased more than the economy as a whole since 2001, offering new opportunities. There's also a new imperative: If you want growth, look at the individual market.

The experience with Medicare Advantage, they say, has taught companies some lessons in how to market to the individual market. Along the way, they've learned some lessons that will need to be applied to the new world:

First, by acting fast, they get a jump start on competitors, gaining essential experience about what works and what doesn't. In 2003, WellPoint started marketing Tonik, a no-frills plan for young, unmarried adults. Hip, online ads tout catastrophic coverage for as little as $77 a month. While selling policies to consumers who think they're immortal sounds tough, there's still an advantage to being early to the market. WellPoint has been building name recognition and know-how.

Second, successful insurers are developing a much sharper view of how to sell to individual customers. Many health insurers are in the Dark Ages when it comes to developing and acting on consumer insights. They can take a page from the financial-services industry, which made a similar jump when the retirement market transitioned from business-to-business pension plans to business-to-consumer 401(k)s, IRAs, annuities and other similar products. Fidelity, for example, has become a master at marketing and branding, slicing and dicing data to identify the behavior and needs of customer segments, and then responding with targeted products.

Third, success requires a comprehensive retooling. The emphasis is on reaching, retaining and empowering individuals. In addition to developing new marketing strategies, new channels and new pricing, insurers also need to equip consumers with the tools necessary to make appropriate insurance and health-care decisions.