Health tech innovation: What is the diagnosis for insurers?

Asia’s insurers must bring their infrastructure up to speed to capitalize on an impending revolution in patient data and analytics, innovators say.

From the rapid uptake of telemedicine to the shift of insurance systems into the cloud, the pandemic has accelerated modernisation in the Asian health insurance space.

With advances in data and technology also offering huge potential for better underwriting, reduced claims and improved customer experiences, Insurtech Connect Asia 2021 convened a panel of health tech experts, moderated by Aly Madhavji, Managing Partner of Blockchain Founders Fund, to discuss the outlook for innovation in the region.

According to the panellists, incumbent insurers still have plenty of work to do to develop systems capable of taking of advantage of the increasing volume and quality of data available. “The pandemic made the inadequacy of the legacy infrastructure in the virtual environment very clear. The trick in health insurtech is figuring out how to integrate into those legacy systems,” said Cole Sirucek, CEO & Co-Founder of DocDoc.

Moving from paper records to structured data is still the biggest objective, outlined Rosaline Chow Koo, CEO & Founder of CXA, who had a career in Asia’s insurance industry and knows first-hand how inefficient many processes still are. Seamless system integration is also key to driving speed, consistency and accuracy of data throughout the value chain, which is why CXA’s solutions draw data directly from clinic, laboratory and HR systems rather than third-party administrators, she added.

Sirucek advised insurers to build knowledge architectures that absorb data in machine-readable ways then leverage analytics to inform basic decision-making. However, he felt no-one in Asia has done this successfully yet. “The focus has been on customer acquisition rather than innovating ways to ingest data in a way it can be properly used,” he argued.

According to Kalai Natarajan, General Manager, DX and Innovation, Dai-ichi Life Insurance Asia Pacific, insurers have always had access to extensive health data, but need to develop new use cases for it, including bringing more data points into underwriting decisions – though challenges remain around data privacy and the condition of historical data.

Increasingly, data from wearables and other emerging sources, used in combination with AI and machine learning, will help insurers tailor coverage and pricing to individuals’ health profiles, provide more appropriate healthcare to patients and reduce claims.

The collection of this data may also incentivise customers to live more healthy lifestyles – in doing so, widening the customer base to include individuals with once uninsurable conditions such as diabetes, provided they can demonstrate they are good risks, Natarajan suggested.

When it comes to innovating solutions, intimate understanding of insurer workflows is key. Innovation teams that work in siloes run the risk of generating ideas that can never be applied in practice - “innovation theatre,” as Sirucek put it, or in Chow Koo’s words, “fantasy land with digital lipstick”. CXA doesn’t even work with innovation teams, she added, explaining: “We have to work with the core teams or projects get nowhere.”

Intermediaries will also have to work harder to justify their value propositions in the digital future, with insurtech increasingly delivering end-to-end distribution capabilities. “We are building the plumbing for insurers to distribute without middle-men, bringing prices down,”

Chow Koo said. In fact, CXA has now sold off its brokerage business to work purely with insurers who, she claimed, have turned their backs on intermediated distribution.

“The pandemic is expediting modernisation, and there is no going back,” Natarajan added. “The way we do business has to change.”

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