A Stimulus for Accelerating Innovation in Life Insurance
By Ross Campbell, Lead for Digital Engagement, Gen Re Life/Health
This isn’t a blog about coronavirus, but it is a jumping-off point for talking about the impact. Let’s deal with the here and now of the fallout. The immediate challenges of the pandemic promoted independent action, self-help and a heightened sense of social responsibility. The appearance of the virus helped to accelerate technology solutions for how we work, communicate, access healthcare, buy goods and receive services.
Ninety Consulting’s whitepaper Insurance Innovation Opportunities beyond Covid-19, for example, invites us to consider what technology solutions in the “new normal” could be harnessed by providers of Life and Health insurance. The whitepaper made me think about important issues:
- Does the embracing of remoteness, using digital solutions, suggest a more open-minded attitude among individuals to share data and use technology?
- Do changes in patterns of working reveal shortfalls in existing Protection product design and are they an opportunity to do things differently?
- Can the focus on health and wellbeing really be the signal for insurers to launch new types of service and support for policyholders?
More than ever we think carefully about the risks we take and how this affects our chances. Yet individuals can still be blasé, and attempts to influence public health often fall on deaf ears. As a reinsurer, the daily mortality briefings have felt odd; until now data on people falling sick and dying every day, often from preventable diseases, has been part of our business.
The pandemic has cruelly exposed the comorbid impact of previously reversible conditions, including diabetes, obesity and poor cardiorespiratory health. The socioeconomic consequences have also highlighted the financial inequalities behind the increased prevalence and unequal distribution of mental ill-health. Insurers will be asking themselves if they can do more to help.
A new era of preventative healthcare and remote monitoring means individuals can take control of their health by leveraging technology. Right at this moment insurers have an excellent opportunity to engage customers with products that add some real value. Life practitioners have been flirting for some years with the idea of a new digital paradigm in underwriting, health protection and remote claims management. Perhaps now is the time for it.
Insurers aim to provide as many people as possible with financial protection. As recent claims have provided a grim reminder, Life insurance protection helps when all is lost, but products linked to health-boosting tech could help to prevent loss. Flexible Disability Income products that better serve home and gig workers could have eased the burden on government during the current pandemic. Developing products based on parametric design,1 such as digital health software, may allow consumers to receive much fairer levels of cover by deploying technology that avoid medical exclusions.
Offering products that offer flexible help rather than pure indemnity is only one aspect of improvements made possible by technology. Simplifying the road to policy issue is another. Chatbots and automated processes can link customers to insurers, and provide faster response times and increased levels of service with less hassle. Emerging technologies are promising to augment and replace current medical underwriting; digital apps and platforms are proven to positively influence medical outcomes. In view of these developments, insurers should leverage the new awareness about health and financial risk by appealing to consumers who have experienced for themselves the brittle nature of social support.
The Life industry has very effective and longstanding protocols that work well, and it has a low appetite for swapping proven methods for new ways of working that may not be as robust. But we are not promoting technology for the sake of it. Proxies for medical risk assessment, for example, will emerge as perfect replacements for health record paper chases and tricky application form questions. It is also important to offer safe solutions in this context, particularly in health interventions. The importance of safe solutions underscores the importance of selecting carefully from the large numbers of potential solutions, choosing only those with convincing scientific underpinning.
We all like technology that provides what we want while keeping our data safe. People, however, are also willing to engage and share data in return for something tangible. Working with these two factors, customers will soon be willing offer disclosures of their digital health metrics in exchange for the benefits of health monitoring if they know their data will be protected and kept private. This is a period of opportunity for the Life industry. Over the next 18 months the smartest and most nimble insurers will take the collaborative action necessary to develop and deploy tech-based solutions for the new normal needs. Gen Re is working with many innovative technology companies and startups to make the leap of faith required to bring their solutions to life.
- Wikipedia defines Parametric design is a process based on algorithmic thinking that enables the expression of parameters and rules that, together, define, encode and clarify the relationship between design intent and design response. https://en.wikipedia.org/wiki/Parametric_design