Time to speed up digital health insurance to succeed !


Health insurance companies have struggled to keep pace with global digitisation, but if they are to compete with an advancing battalion of disruptors, they need to mobilise coherent digital strategies now.


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The digital world is seen as major threat to the health insurance industry. This is because insurers themselves seem to be more dazzled by the oncoming glare than galvanised behind comprehensive strategies and best-practice development frameworks for digitising their businesses.
There is a general agreement around CRM and the customer experience. However, the deeper benefits of digitisation are yet to be seen. These are administrative and medical streamlining and cost reductions, improved health for customers and ultimately, sustainable revenue growth. All of these have been noticeably slow to emerge.
Trends
In Europe, there have been pockets of progress. There is collaboration of AXA with Ecole Polytechnique in France, for example. This has seen the creation of a ‘Data Science for the insurance sector’ chair. This chair has focus on developing new techniques to exploit data collected by insurers and attract data science talent to the insurance business. In 2015, the company also formed a start up incubator, Kamet, to create a new generation of disruptors that will eventually join the AXA Group.
‘Grow your own’ is certainly one way to address the challenge posed by digital giants such as Amazon and Google as they mass their own forces to take on the health insurance space, but at the other end of the scale, much of the innovation is coming from smaller payers as they address customer influence.
The Exeter of UK has developed a digital-first model that promotes digital healthcare as a benefit of health insurance. The app developed by them provides access to digital health services without impacting a customer’s no-claims bonus. This also includes phone and video GP consultations, prescription issue, postdiagnosis second opinions, and physiotherapy and mental health consultations.
The Exeter’s digital-first approach for customers is a really interesting one and shows it is listening to its customers, who are increasingly using devices for everyday matters, notes  Rod Jones,  the head of partnership at the company’s insurance comparison partner ActiveQuote.
Strategies like this clearly resonate with tech-hungry consumers – one of the reasons why disrupters have a strong card to play against the more cumbersome approach of incumbent payers, a trend identified by consultant McKinsey in a recent article on how digital is reshaping health insurance in the US.
While more agile providers are moving quickly, many are still finding it difficult to make headway with their digital transformation programmes. Multiple challenges, spearheaded by the lack of enterprise-wide collaboration and a major shortage of skills across the development, mobile, design, analytics and tools fronts, are compounded by a lack of internal focus and the sheer scale of the demand and urgency.
ORDERS OF IMPORTANCE
Prioritisation will always depend on the individual business, but the authors of the article advocate a more collaborative approach which brings together stakeholders, drives new working practices – particularly in development – and focuses on investment and orchestration of a new technology ecosystem, the elimination of legacy complexity and the development of APIs for constituents, partners and customers.
Ideally, this should be driven by a chief digital officer who can identify and prioritise momentum builders. The ultimate call to action is 'Do it now' – but the authors also make a strong case for looking outwards to forge partnerships with disruptors themselves.
This suggestion is also made by partner Henrik Naujoks and his co-authors in an article from consultant Bain, which takes the view that insurers themselves hold the key to healthcare’s digital future. “They can become the principal players at the center of an ecosystem of healthcare services” they write.
By looking at the potential application of 30 technologies across the entire healthcare insurance value chain, they suggest that digitisation could help a ‘prototypical’ German health insurer boost its premium revenues by 6-11 percent in five years, and cut costs by 15-20 percent using digital tools.
According to Bain, there are seven key technologies on which insurers should focus:
1. Infrastructure and productivity (data exchange)
2. Online sales technology (mobile)
3. Advanced analytics (new business processes, CRM, claims processing and fraud detection)
4. Machine learning (care, claims management)
5. Internet of Medical Things (this aims at early detection and prevention)
6. Blockchain and digital ledger (treatment cost control)
7. Virtual reality.
With a more focused approach, insurers ought to be in a prime position to become the nucleus of a network of stakeholders, including hospitals, doctors, patients, pharmacists, pharma companies and device makers. Some observers would go further, suggesting that digitisation could be a force for change, with increased predictive analysis, for example, shifting the balance of power from claims management to customer benefits and the addressing of deeper challenges in healthcare systems.
“In the UK, combining insurance, AI, robotics, digital, the workforce and social enterprise together with an integrated approach could produce a new model, which could provide much more support to the difficulties that are present in the NHS, alongside providing much greater benefits to its direct customers,” says Richard Skellett, founder of campaign group Digital Anthropology.
There is a note of caution, however. Insurers should be careful not to favour the front-end over an integrated behind-the-scenes strategy.
Our views
The digital world is everywhere so health insurers do need to make note of it.

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