Technology integration in the health insurance business

Insurance Companies are dealing with an environment where client expectations and technologies

available to meet them are evolving dramatically. Consumers expect Insurers to deliver value,

service and experiences on a par with those they have from the other industries.

Telematics - integrated use of informatics and telecommunication - could leverage Internet of

Things (IoT) to transform the insurance relation with customers on P&C business, not only on the

well know motor insurance telematics business.

The health ecosystem represents one of the more interesting areas where the Insurer could

implement this new approach due to the drastically changing nature of healthcare technologies and

the high level of customer engagement on this topic. A Health Insurance Company could address

five value creator levers (Health insurance - Telematics opportunity): risk selection, pricing risk

based, value added services, loss control, loyalty and behaviors modification programs. This holistic

approach to integrate technology within insurance value proposition not only creates more frequent

and relevant real time dialogs with insured, but mainly impact on the health insurance profit pool.

At international level, some concrete examples of adoption of this value creation levers by the

Insurance Sector are appearing:

• Pact Health is one of the first examples of risk based pricing. Health tracking app Pact

recently launched a supplemental health plan for employers acting on top of existing health

policies. This plan measures the level of activity using the smartphone features and wearable

sensors and reduces the deductible for active employees while it raises the deductible for

inactive employees. This approach based on new technologies and wellness incentives/

punishments is defining individual insurance conditions based on individual behavior as

proxy of individual level of risk;

• FAB Health Plan delivers new value added services to its insured through a partnership with

Consiglio dal Medico app. This app allows users to receive 24 hours a day all days of the year

remote health advice through a chat with a network of medical doctors. The Health Plan will

fully reimburse the first 5 medical-advice requests made by the single user in one year. In this

way FAB plans to evolve from a “pure payer” towards an actual reference point for the health

sector. The partnership with Consiglio dal Medico can improve the customer experience by

connecting the insured with the preferred medical providers, also due to the doctor’s detailed

profile and the rating from other users;

• Discovery Holding worked on loss control with a vertical approach on diabetes. The

insurance company fully reimburses to the insured a Bluetooth-enabled telemetric glucose

meter from ForaCare and integrates its usage in its rewards and behavioral orientation

scheme. This solution moves from the evidence that a large part of diabetes care cost is

related to complications and that they could be limited by good glucose control, co-existing

conditions management, regular screening and lifestyle modification. Discovery, through this

approach, enhances cost effectiveness and efficiency of self-care and improves doctor-patient

communication aiming to reduce the diabetes care cost of its collective health plans in South

Africa.