Old and obese: Health insurers must adapt or die
“Fat, 65-year-old gentlemen who don’t realise they have a huge problem.” That was one speaker’s description of insurers at last week’s Global Health Insurance Conference in Amsterdam. Worryingly, most of the delegates agreed they had a problem.
The reason for this panic? Pretty much all the speakers said that the big tech guns are riding in, armed with more than a few fistfuls of dollars. In fact, they have billions. The usual bar to entering the market – and one of the reasons stalwarts of the industry have felt secure – was capital. But to the likes of Google, Amazon and Microsoft, that bar looks mighty low.
Microsoft is currently hitting the headlines, launching a new healthcare division based on artificial intelligence software – it’s already planning monitoring systems and large scale studies into conditions like diabetes.
The new world order will see traditional players, the large insurance companies, jostling for position with clinicians / providers and tech companies (perhaps in league with each other) in an increasingly crowded market.
Ron Buchan, former CEO of Allianz Worldwide Care, summed it up thus: “The day of the health insurer has gone. The day of the health manager – which is how I suggest health insurance should be moving – is dawning.”
This means insurers learning new skills to stay competitive, and using technology to gain and retain that all-important constant contact with the customer. And they need to learn one size doesn’t fit all as, increasingly, contracts are personalised to the customer.
Telehealth, mobile health, wearables, AI, machine learning – a fourth industrial revolution is dawning and insurers need to work out where they are going. All the insurer delegates agreed but almost all privately conceded that they needed to do more and to pick up the pace if they are to see off the new competitors.
Another take out was that you have to make insurance sexy and to extend the lifetime value of the customer.
Too often health insurance is seen as “a grudge purchase” according to Dr Keith Klintworth, deputy CEO of health score company Vitality, something consumers don’t value. Or as Peter Ohnemus, founder, president and CEO of Switzerland-based dacadoo, which assesses your health and scores it, says, insurers need to be part of “the something for something economy [built on] the personal relationship”. Generally, this means rewarding those doing their best to stay healthy – monitored by the latest tech, of course.
That means rewards like free Starbucks coffee which according to Klintworth scores particularly highly or even, according to Ohnemus, for the most healthy, free bicycles and even time off work!
And what of insurers who choose not to embrace this technological revolution? As one speaker said “Just ask Nokia, or as future generations might ask, ‘who?’”
Subscribers can read more about how to survive the oncoming crisis in healthcare insurance in next week’s Healthcare Nova.
We would welcome your thoughts on this story. Email your views to David Farbrother or call 0207 183 3779.
