Insurtech 10: Digital risk reduction - KPMG Thailand
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Trend 4: Digital risk reduction

Trend 4: Digital risk reduction

The adoption of wearable tech - smart technology that monitors physical activity via apps linked to mobile technology - is beginning its own revolution within healthcare.

Insurers are keen to acquire data that can help them assess, and therefore mitigate, risks. They are now partnering with customers by getting them to exchange data for premium discounts. In the US, John Hancock policies have gone one stage further by requiring fitness tracking data to be submitted1. This lends credibility to wearables data as a valid new source for risk assessment, rather than simply a distribution loyalty gimmick.

A brighter, healthier future

Access to doctors is problematic in stretched national health services. This has resulted in insurtech being implemented into the rapidly growing telemedicine market.

In the US, many states are changing laws to allow telemedicine to be developed2. In Europe, remote consultation with a doctor is common in France and is growing in the UK. Though not currently permitted in Germany, it is only a matter of time before insurtech is adapted there too3.

The benefit of insurtech in healthcare is apparent. The data gathered allows carriers to mitigate and reduce risk while influencing mutually positive behavior in the customer. The customer will likely be healthier and perhaps even live longer, while the insurer builds a more complete dataset.

Early intervention can prevents the development of chronic health conditions and can provide considerable savings in claims. Better data can build better products and can also be used to remove friction points that deter consumers from buying insurance, such as a lengthy series of medical consultations before a policy is agreed upon.

Access to better quality healthcare data offers the possibility of a future where secure patient records can be shared in order to settle claims simply and easily, as is beginning to happen with flight delays and lost baggage.

This would require a move to fully digitized patient records, and though Estonia is leading the charge with all health records stored in blockchain, that will have to remain aspiration for some time4.

A healthier insurance market

A natural affinity exists between life coverage and healthcare. Higher quality healthcare and prevention of major illness can extend life, which is good for life insurers' business.

Health is currently engaged in an arms race with insurtech to offer a digital service that will allow companies to prevent, manage and eliminate risk.

Insurers need to add on services to engage with customers and give them what it is they want. However, if they succeed, they will have developed new sources of growth as health is one of the few natural ecosystems insurers have. It is essential they invest outside core competencies and take risks on new business models.

Outlook:

Life insurers who fail to secure a place within a health ecosystem within the next few years will likely find their business models challenged. Without access to the kinds of datasets being acquired today, insurers may not be able to manage risks or engage with their customers.

As wearables continue to be adopted by insurers and customers, there is expected to be an increased use of genomic and epigenetic technology to determine a customer's biological age above their chronological one.

This will likely radically alter the way that life policies are priced and provides a more accurate way of assessing factors such as smoking and drinking on an individual's longevity.

Players in this space:

Babylon/Prudential - AI-powered digital health services

Discovery Vitality - health insurer that rewards policyholders based on fitness data

Good Doctor - Ping An's telemedicine product

Medopad - developing algorithms to improve diagnosis and risk assessment

Muang Thai - developed BaoWan product to monitor diabetes and reward condition management

Wellthy Therapeutics - AI-powered digital therapeutics

Footnotes

1 John Hancock adds fitness tracking to all policies
2 States Continue to Expand Availability of Telehealth
Will 2018 be the year in which telemedicine takes off in France?
Blockchain and Healthcare: the Estonian Experience

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