Digital health has launched an unprecedented yet unsurprising revolution in the Insurance industry. Digital health is democratizing data, and in the process, empowering different stakeholders including consumers, doctors, pharmaceutical companies, insurers, governments and regulators.
The Insurance industry has taken upon itself to spearhead this transformation, ranging from introducing new offer designs to disrupting entire business models, leading to re-define and re-imagine the ‘raison d’être’ of these well-established companies.
However, new trends and predictions come along with new caveats for the traditional industry. The same disruptive innovation trends that are transparent, offering easy comprehension of analysed data and digitized processes will eventually make services such as calculating and underwriting risks, claims management processes, etc., completely automatized. There is a long-term risk of disintermediation, where the intermediary, the insurer, will become commoditized and eventually fade out of the picture. This is the reason that this industry needs to continue steering this movement of influencing its’ consumers on understanding the advantages of digital health technologies, teach them the cost-sharing perspective and the impact of better health-care decisions, while upgrading its’ existing offerings and competencies to stay ahead in the game.
Now is the opportunity to start differentiating their core offerings from competitors. New-age insurance companies like Oscar and SimplyInsured are providing disruptive services to customers, rewarding them for healthy behaviours, communicating in a simple language, providing access to physicians, and offering great price transparency on their insurance contracts. Traditional insurance companies need to take the hint and get on the bandwagon with disruptive innovations to attract the new-age consumer while retaining the old school ones.
Four major digital health trends with impacts on the Industry industry 1. Connected Objects: With the world of connected objects and wearables expanding rapidly, it is opening up enormous opportunities for insurers.
Lower claims due to better health monitoring: Insurers can now better evaluate health risks of their customers, by monitoring the real-time health data transmitted via their wearable to their smartphone and then to the insurer’s database. Monitoring this data can lead to a better lifestyle and health for the customer, translating into lower claims and thus lower losses for the insurer.
Design new offers and policies: Connected objects hold a vast amount of data on their customers’ daily lifestyle. This data can help insurance companies design personalized insurance contracts, varying premium pricing and discounts, corresponding to the changes of the customer’s lifestyle, as monitored by the smart devices.
2. Blockchain technology: Blockchain in the health care industry allows for open and accessible data tracking, verifying and provisioning of health and preventive care. Blockchain allows for the hospital data to be securely and safely transmitted and easily accessible with relatively minimal privacy risk to all patient stakeholders, including the patient themselves, family, caregivers, clinics, providers, insurance companies and all those with a stake in their patients’ health. Blockchain in health care can provide an answer to several challenges.
Health care insurance claims processing: Insurance processes are often long and cumbersome, reimbursement is opaque and takes long to take place, fraud is prevalent, and transactions are frequently difficult to reconcile. Smart contracts powered by blockchain can allow stakeholders to conveniently reconcile the patient’s data and settle claims in a transparent, immutable and responsive fashion.
Medical malpractice insurance DAOs: Health care providers such as doctors and nurses could come together to form a Decentralized Autonomous Organization (DAO) to maintain a transparent audit trail of premiums received and claims paid. These could lead them to create a self-regulated peer-to-peer insurance model to monitor reimbursements and payments.
3. Telecom and health care: Health care is surrounded by innovative m-health technologies that are empowering individuals as never before. Social media platforms are connecting patients, physicians and insurers with one another in real-time, allowing them to exchange information and process claims and payments in new ways. Mobile apps bridging the gap between a smartphone and a medical device, allowing customers to conduct ultrasounds, test blood sugar and monitor sleep quality using a smartphone.
Influence customer behaviour: By offering partnerships between telecom providers, smart phone apps and insurance companies, insurers can influence customer’s behaviour by offering them insights about their lifestyle on a regular basis. This will motivate customers to live a healthier and more active lifestyle.
Provide assistance to the aged or differently-abled people: Insurance companies can provide preventive care for the elderly and differently-abled people by using telecom services and connected objects to stay in constant touch with them, and offering assistance and emergency services, if the need arises.
4. Sharing economy and e-health: Sharing economy is not far from entering the e-health market offering smartphone apps to integrate Uber or similar services to ensure that customers get treatment quickly, without long and administrative formalities of ambulances; or the medicines are delivered at the patient’s doorsteps when required. There’re also opportunities to offer peer-to-peer insurance pooling premiums from people who you trust are in good health, or further, request for specific type of insurances in a group of people.
Uberization: Companies such as Uber are partnering with MedStar (US) and MonDocteur (France) to transport patients to hospitals and back in the shortest time possible. Uber also launched an initiative called UberHealth during flu season in the US, delivering $10 wellness packs and vaccines at home from registered nurses.
Peer-to-peer health insurance: Niche insurance companies are coming up with peer-to-peer health insurance models where you pool premiums with people who you know are in good health; thus reducing the risk of losses. Initiatives such as BoughtByMany in the UK allow users to group together with other customers to request a customized insurance for a group of people, e.g. health insurance for vegetarians in the Greater London area aged between 35-50 etc. BoughtByMany then negotiates with underwriters to design new offers.
Challenges in integrating digital health in your organization No innovations come without their challenges in tow. With the increasing number of opportunities that the onset of digital health has brought for insurance, it comes with major challenges:
Location tracking of wearables: Wearable devices can be easily located via wireless protocol transmissions, and burglars or thieves could use this information for malicious intent.
Data leakage: User shares a lot of personal information, payment details and intricate health information on these apps and wearables. Security lapses in data could lead to major breach and compromise on the user database.
However, if appropriate measures are taken to counter security issues, ranging from implementation of stronger privacy policies, to deploying a high-end threat intelligence system, these challenges can be resolved.
Re-invent yourself to a disruptive Insurance provider – with a focus on the future of health care Build a collaborative long-term relationship of trust with your customers, by setting a strong foundation, constantly engaging them in collective decision-making regarding their choices.
Customer-Centricity: The traditional insurance model is quite agent-centric, where commissions and client relationships are contained between the agent and the end-customer. The FS providers should take charge, and partner with end-customers in order to influence and empower them to take intelligent health-care decisions. Customer centricity can be demonstrated in designing personalized offers for customers, being more accessible to address their problems, provide transparency in contracts and processes and empower them to make their own health-related decisions.
M-Health: M-health has the potential to provide (i) improved access to care, especially those with chronic illnesses living in remote or rural areas; (ii) improved patient engagement, managing doctor appointments, reminders on medications, pick-ups for medical visits and home delivery of medicines; (iii) reduced Medicare frauds, because digital apps will allow Medicare to correlate claims data with location, and time data from the digital health apps to look for fraud.
Big data: While insurers posses considerable amount of fragmented data such as health records of patients including pharmacy results, hospital bills, laboratory test results etc. followed by their claims requests, and bills, they still lack the infrastructure to be able to better process this data and maximize the amount of information that can be extracted. For healthcare delivery, we’re rapidly moving from a world of inbound patients to a world of inbound data. The impact of this shift on the healthcare system and how consumers use and act on health information should not be underestimated.
Digital health will allow providers to effectively manage and coordinate patient care in a complex environment. This will be critical as the government and insurance companies increasingly “bundle” payments and determine other ways to shift risk to providers.
What are your views on Digital Health in the Insurance industry? Email us, we would be happy to have your insight.
Happy Reading! The CH&Co. Editorial team
The Latest on Digital Health in Financial Services
Uber and MonDocteur (France) join hands to offer pick-and-drop services for patients to visit their doctors and hospitals The first of its kind in France, MonDocteur app in France integrated Uber app in its’ smartphone app to simplify transportation services for its’ customers and patients, with the objective of minimizing last-minute cancellations and delays for the doctor’s appointment. For Uber, this is the third major collaboration in e-health after MediCare and UberHealth initiatives. Press release (in French) here
Orange partners with the first health Mutuelle in France, Harmonie Mutuelle, to develop new e-health care services Orange, the French telecom giant, has recently entered in collaboration with a French Mutual Insurance, Harmonie to launch innovative health care services, and bring about a digital transformation in the organization. They focus on finding solutions to provide improved health care to all customers, improve the daily life of aged, isolated or sick persons in the comfort of their homes, and maintain the health capital of every customer. Press release (in French) here
Legacy mobile phone brand, Nokia, purchased Withings, a start-up that makes connected weighing scales, thermometers and blood pressure monitors With the acquisition of Withings, and the re-structuring of internal digital health team, Nokia aims to enter the IoT workspace and tap into a large & rapidly expanding digital health market. Full article here
Blockchain start-up Tierion partnered with Philips Blockchain Lab to innovate medical data with digital ledger consensus, raises $1 million Tierion’s platform allows an enterprise easy access to the blockchain to verify any document or business process. This is a powerful tool for companies operating in a regulated environment like financial services, healthcare, insurance, or government services. See news here
Healthcare technology start-up MC10 is launching an ultra-thin tattoo-like sticker that can make contactless payments to our bodies MC10’s Wearable Interactive Stamp Platform (WiSP) is a breathable, waterproof stamp that uses NFC technology to pair with smartphones and NFC readers. When removed it tears, making stored information unreadable.The technology can be used in clinical environments to transmit important patient information but MC10 is hoping to move beyond the healthcare world. Read news here
Funded Eur 1.4 million by France-based insurance company, Malakoff Médéric, a start-up IgniLife is developing health care connected objects with a focus on health prevention, and hosts 3 million users on its current platform With a web and mobile platform, Ignilife offers personalized health experience to its’ 3 millon users, taking into account their physical and psychological conditions, with a use of connected devices and smartphones. Read article here
AXA Strategic Ventures strengthens its’ presence in the connected health care domain with a recent investment in BioBeats BioBeats, is developing a wellness tracking platform for consumers, health systems, and corporate wellness programs. The company’s new app, called “Hear and Now”, listens to the user’s heart rate using the smartphone camera while providing the user with mindful breathing exercises to complete. Read news (in French) here
CH&Co Digital Case of the Month: CloverHealth
1. CH&Co. was a co-sponsor of Consensus 2016, held in New York from May 2nd to 4th. Over 1,500 participants from around the world gathered to discuss a topic that has a lot of hype – blockchain technology. The tagline for the CH&Co. co-sponsored Consensus 2016 event was “Making Blockchain Real” and right from the start an important question was posed: “is blockchain adoption 3-5 years away or more than 10 years away?” Read more on CH&Co.’s Consensus takeaways here
2. CH&Co. was a workshop leader and a participant at the Digital Technology in Wealth & Asset Management Conference (London, 18-19th May 2016). On the first day, CH&Co. led 2 workshops on: a. How Asset & Wealth Managers can self-disrupt their own models and change the way they deliver services with innovation b. What are the business areas where the digitisation can bring the most value The second day was dedicated to conferences and panels on the key challenges of digitisation and how disruptive strategies could help to adapt more quickly to changing regulations, create operational efficiencies, improve distribution channels and boost profitability.
3. CH&Co was invited to deliver a keynote about blockchain at the European Identity & Cloud conference in Munich last week. It was a great experience and we want to thank the organizers Kuppinger Cole and Joerg Resch for the opportunity. Our expert Sebastien Meunier had great conversations with specialists in Identity & Cybersecurity, and met with Blockchain firms such as Ethcore and Evernym. An article about the presentation was published in Computerweekly. Read more about the event on our Fintank site here
4. CH&Co. will organize the first Fintech event for the French Chamber of Commerce and its members in Japan on June 16th. The event will focus on the Fintech eco-system and feedback experience from industry players. Featuring speakers are Paidy (payment disruptor) and 8-securities (robo-advisors).
Conferences, exhibitions, workshops…If you would like to participate in our events, please register here. Membership is free!
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Chappuis Halder & Co. is a consulting firm specialized in Financial Services with offices in North America, Europe and Asia. We help our clients in several industries, Corporate & Investment Banking, Commodity Trading, Insurance and Retail & Private Banking, with a permanent focus on expertise and research, especially in the Digital area.
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