Health insurance - Telematics opportunity

Telematics finally is an integrated use of informatics and telecommunication, it is about capturing,

storing and analyzing data via telecommunication devices. As analyzed in my previous article

“Motor insurance telematics - Five value creation levers”, Telematics could be one of the most

relevant digital innovation in the insurance industry directly impacting the technical results. Due to

the pervasive diffusion of the Internet of Everything this approach could be extended from motor

insurance to other insurance businesses.

Insurance Companies have the concrete opportunity to integrate their insurance value propositions

with the use of the information coming from sensors. These sensors could monitor behaviors, status

and context influencing the risk covered by the insurance policy.

I consider health insurance as one of the most interesting areas of adoption, where there is the

opportunity to generate more value for Insurers and clients. As identified for motor insurance, also

in the health insurance business it is possible isolate 5 value creation levers:

1. Risk selection, enhancing the underwriting phase with a temporary monitoring based on

dedicated devices;

2. Pricing risk based, developing insurance policies with pricing tailored to client behaviors;

3. Value added services, developing client tailored ancillary services that allow the Insurer to

play as an omni-channel medical concierge;

4. Loss control, developing a broad approach to mitigate claims:

• developing "early warnings" system capable of anticipating more expensive claims,

• adopting e-health and m-health approach that are able to reduce health-care costs,

• improving reimburse valuation;

5. Loyalty and behaviors modification programs, leading the client toward riskless

behaviors.

Health Insurer could innovate its strategic position exploiting the full potential of telematics,

activating a virtuous circle where the Company could offer in a profitable way better and more

affordable value propositions to less risky clients. To adopt this approach the Insurance Company

needs to move from the “payer role” to the “pivot role” within the health ecosystem, partnering both

with innovative technology players and medical providers.