Today, more than half of the world’s population are active social media users, and on average people spend five years of their entire lifetime on social media. That includes approximately 35 minutes per day on Facebook. But what does all this mean for the future of health insurance? I will try to answer that in less time than it takes you to check your Facebook feed…
At last week's 9th Global Health Insurance Conference in Amsterdam, it was no surprise that the focus of events was on the impact of technology on the future of health insurance, with a mixture of both optimism and caution amongst participants. Whilst technology has the potential to open many doors for our industry, the sheer scale and pace of technological evolution means it can be difficult to make sense of the changing headwinds.
The health insurance industry has made significant strides in recent decades, with smartphone Apps and online member tools now considered the norm, while technological advancements continue to improve back office processes such as underwriting and claims management. However, we are still only at the start of this journey, and the next five years are likely to be game-changing for our industry.
It was clear from discussion at the Conference last week that there are three key trends driving the digital global healthcare and insurance markets; namely wearables, big data and telemedicine. The industry is already facing increased competition in these areas, including from outside the traditional insurance sector, as new digital tools change the way consumers think about how they protect and manage their health.
Approximately one in six consumers currently own a wearable, and these devices continue to be integrated into health insurance plans to reward consumers for healthy behaviours. But in the near future the wearables of today will become obsolete, and health insurers will have to contend with new devices, such as digital contact lenses that monitor blood sugar levels, or clothes that record your heart rate when you run. Ultimately the rise of wearables presents significant opportunities for health insurers to better manage risks and keep premiums down for consumers.
More broadly, the true potential for wearables lies in the data they represent, which leads onto the next key trend – big data. With more than eight billion interconnected devices worldwide, business now have access to data on a scale that was previously unimaginable. Over the coming years, insurers and the healthcare sector more widely will need to significantly improve their ability to harness this data for commercial benefit; from customised product and marketing strategies for each individual, through to improved risk modeling tools to reduce loss ratios.
Finally, the rise of telemedicine and mobile health is fundamentally changing the health insurance industry. While still relatively nascent, this technology has the potential to open up new markets by facilitating remote medical consultation for those living in poor or rural areas; increasing access to healthcare for groups who previously might not have been able to visit a doctor, let alone have health insurance.
More fundamentally, new technologies could help tackle the ever rising cost of healthcare and keep the costs of insurance claims down. Enhanced virtual care and monitoring services which spot early warning signs in high risk patients will help prevent the need for costly acute medical interventions. Meanwhile Apps that provide nutritional advice or support people to quit smoking could help address the growing danger from non-communicable diseases. Goldman Sachs has suggested the US alone could save US$300bn from digital health solutions, and the savings worldwide will be even more significant.
In summary, the future looks bright, with technology presenting significant opportunities for the industry as a whole. However, when dealing with people’s health and well-being, there is good reason to be cautious in the way we implement technological progress. Every week there is a new reminder of the vulnerabilities that technology can create. Given the sensitive nature of the data held by health insurers, ensuring effective protection of consumer information is paramount. This is not an issue that can be resolved overnight, and the industry must continue to collaborate and work with regulators to ensure the rules governing data protection are fit for purpose.
So what does the future hold? One thing is clear – this is an ongoing journey. The health insurance industry will need to continue to innovate and adapt with the evolving technological landscape, and find new ways to meet the needs of our digitally savvy customers. Ultimately we must harness technology to go beyond the traditional parameters of health insurance, and deliver the truly integrated health solutions of the future.
Nicolas Roubin, Business Development Director (Europe), Now Health International