Emerging trends in health insurance

Health care is changing. It is moving from reactive to preventative driven by changes in attitudes and advances in technology, particularly personal technology.  This has huge implications for life and health insurers.

Why is it changing?

We have seen a dramatic reduction in the incidence of communicable diseases through the spread of better hygiene, clean water supplies, vaccines and antibiotics.  However, there has been a parallel increase in the incidence of Non-Communicable Diseases, (NCDs).  Cancer, heart disease, stroke and diabetes are the big four.  More than 60% of deaths worldwide are due to NCDs, killing 36 million people each year and set to cost $47 trillion by 2030.  By then the global number of overweight and obese people may double to 3.3 billion and cause over 50% of deaths.

Fewer than 5% of Americans qualify for the American Heart Association’s definition of ideal cardiovascular health.

We are living longer but not necessarily healthier.

Many of these conditions are, almost by definition, preventable, or at least brought on by lifestyle and environmental factors that can be changed.  Prevention has therefore become a major factor in dealing with these diseases.

From reactive to preventative

Societies around the world are waking up to the possibilities of preventing diseases and improving health.  Individuals, governments and companies are taking greater interest in health and wellness programmes.  Organisations with highly effective wellness programmes report significantly lower voluntary attrition than do those whose programmes have low effectiveness; (9% vs. 15%).  Wellness may be seen as a key preventative measure that helps reduce stress, increase productivity and drive down health insurance premiums.

Making it possible

Developments in technology, particularly wearable technology, are driving the information revolution in hyper-personalisation.  Smart contact lenses for diabetics are a simple, effective tool that monitor blood glucose, changing colour if levels alter dangerously.

Malignant melanoma, the most dangerous type of skin cancer globally has a five-year survival rate of about 90% – if caught early.  We can usually recognise obviously suspicious skin lesions but are often unaware of what warning signs to look for.  Personalised smartphones apps can scan potentially suspicious skin lesions and use a mathematical algorithm to identify when medical intervention becomes necessary.

The number of recorded variables is growing exponentially.  Insurers will use these for more and more personalised underwriting and rating decisions.

Consequences for Life and Health insurance

We are seeing a move from the reactive claims model to the preventative wellness model; a shift in emphasis from a medical service to a health service where many aspects of health care are integrated.  Services funded by or managed by health insurance are seeing a comparable move towards protection and rehabilitation rather than just recompense and compensation.  This model requires insurers to have much greater contact with their customers, building services around collaboration and easy interaction.  What are traditionally seen as back office functions are becoming front office and have to be supported by systems of engagement, (SOE).  These require seamless integration with the back office systems of record, (SOR) and so the best SOE will actually also be the SOR.  Organisations will have to adapt to survive and innovation is the name of the game.  Insurers will learn to incorporate new and multiple data sources, integrating them with a level of connectedness that we have not yet seen to create fresh and innovative services and support for health and accident claimants.  Will your company be in the van, or will you be playing catch-up?

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