Our series on Personal Insurance: “E-health: shifting from insurer to key player in prevention, thanks to digital”
The impacts of the digital transformation, and the prevalence of connected objects in particular, are causing quite an upheaval within the insurance sector. Insurance providers will benefit from investing in new technologies and integrating them within their business model. E-prevention and e-transformation are fast becoming the two main emphases used to stand out from the competition.
The cost of healthcare is steadily increasing, caused by an ageing population and an increase in chronic illnesses in particular. In France in 2014, this cost represented 12% of GDP, or €256.9 billion. In parallel, various sources indicate that the State is withdrawing its contribution towards these expenses, alongside a growing exodus of medical staff.
Key players in personal insurance affected by these trying developments are also finding themselves faced with changes brought about by the digital transformation in terms of usage and consumption. Not content with taking over the home or the car, the IoT (Internet of Things), to name just one example, is now shaking up the field of healthcare. And if e-health comes as a boon for InsurTech companies and other start-ups, what does it mean for traditional insurance providers at a time when digital is revolutionising what is a saturated, unprofitable and highly competitive market?
What route can insurance providers take in order to adapt to these changes? E-prevention in products and services, e-transformation in business lines: these are the two essential components in harnessing e-health as a means to revitalising the personal insurance market.
E-prevention in products and services
Technologies associated with e-health provide an opportunity to gather mass data. The ability to finely analyse each risk and to adjust customer contracts in real time is a real shake-up to the system.
According to Odoxa’s connected health barometer (January 2015), 29% of French people are using connected objects. Not just mere gadgets, the IoT serves as a real means of prevention (lifestyle, taking physical exercise, healthy eating, etc.). To use just one example, diabetics are now using apps to help manage their blood sugar levels. Monitoring, care, advice, e-health is of real benefit to people with illnesses. And at lower cost. In following such practices, users will more often than not volunteer their personal data in order to seek support and encouragement from their network, to stay motivated or to access tailored advice.
Insurance providers therefore need to attempt 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. In these difficult circumstances, insurance companies will benefit from investing in these new technologies, and integrating them within their business model. They form an essential component in optimising and generally improving their business transactions, expanding into new markets and therefore growing their turnover and profit.
E-transformation in business lines
Modernising the Front Office and overseeing a programme of digitisation: two internal drivers in taking concrete action to revitalise the insurance industry.
The workstation as used in distribution networks is becoming more sophisticated, in terms of both functionality and ergonomics, or even end-user services, due to the integration of digital tools used as sales aids. One such advance is direct interaction (insurer’s website and social media) via the Internet and other mobile apps, which seeks to increase traffic from prospective customers and to win new customers.
Tomorrow’s insurance company will need to have a programme of digitisation that is adapted to the maturity of all its activities. From analysis tools to descriptive and predictive models, all the key indicators must be closely monitored in order to be able to coordinate the different fields of activity. To do so, they will need to develop products and services “in agile mode” that are associated to a connected object. An ideal association for meeting the needs of customers more effectively and, in turn, increasing turnover by generating new populations, whilst at the same time gaining the loyalty of existing customers.
As we can see, alongside the impact of digital transformation, the volatility of customers and pressure from competitors are driving insurance providers to reinvent their business model.
Emmanuel Gambart de Lignières
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