BUSINESS LINE: Be more than an “insurer”, become a “protector”
Insurance providers are now able to anticipate health-related risks thanks to the data collected by new technologies. Portrait of a new digitally-sourced model.
Our series on Personal Insurance: “E-health: shifting from insurer to key player in prevention, thanks to digital”
Personal insurance is undergoing a step change. The traditional insurance model based on risk pooling is currently being shaken up by Big Data and by the mass collection of consumers’ personal data. The rationale behind risk pooling is to take a set of individuals and apply the same risk to this one cohort. The explosion of data and of the means by which to collect it (connected objects such as intelligent scales, connected pacemaker, social networks, remote monitoring systems such as home automation, etc.) provides an opportunity to refine these cohorts, to offer personalised services and tailor-made pricing, and so on. This forces insurance providers to shift gradually from a pooling model towards a prevention model.
In order to become a key player in prevention, here are three possible directions to take.
The companion insurer
One quarter of patients suffering chronic illness are using publicly-available connected objects (Odoxa’s connected health barometer – January 2015). Monitoring, care, advice, e-health is of real benefit to people with illnesses. And at lower cost. Online platforms, for example, are used to transmit reliable, ongoing pathological data to healthcare professionals. Users are therefore more inclined to invest in their own healthcare through the use of automatic alerts, assistance provided by collected data analysis, management of medication linked to an RFID chip and improved user experience in the prevention of risks and in consumption. Similarly, they are ready to invest in elderly persons remaining in their own home, able to monitor their constants and send real-time alerts to the emergency services or a support person.
INNOVATION: insurance providers are no longer content to merely cover a risk – instead they support users and help them to reduce this risk through prevention, using new digital tools.
The coach insurer
The majority of users of connected objects tend to be people in good health who are looking to improve their wellbeing or work towards a sporting goal. Insurers can find a part to play in this scenario. More than mere gadgets, these connected objects blur the distinction between wellbeing and medicine: they are a basic means of prevention (lifestyle, physical activity, healthy eating, etc.).
INNOVATION: with customers in favour of further developing connected health, this bolsters the success of innovative products that insurers are able to provide via new offers or targeted partnerships with major companies influencing this market or InsurTech companies.
The confidence-inspiring insurer
Whereas for 78% of the general public, connected health is seen as an opportunity to increase prevention, only 29% are already using these e-health objects. To continue to develop this trend, insurers need to focus on creating trust-based services and on providing mutual benefit, thanks to improved customer relations. This idea of mutual benefit will be the cornerstone of the growth of personal insurance in the future, as a sole means of continuing to serve a demanding population and of gathering increasingly more information on each of the individuals within it. Insurers simplify their risk selection and generate greater retention and better loyalty among their customers. Customers are offered benefits such as real-time alert services or complete care, but also more personalised services linked to their lifestyle and consumer behaviour. Early adopters have included these in tailor-made programmes, intended to improve the way customers are supported in their lifestyle choices, and thereby reducing the associated risk.
Insurance providers are attempting to set up some form of iterative customer process, the result being that they can better identify customers in order to keep adapting their offers and services… and, in doing so, creating a virtuous circle of innovation.
INNOVATION: insurance providers need to focus on creating trust-based services.