Design Principles for Digital Health Insurers
A glimpse into the future: living with type 2 diabetes – an example of upcoming challenges for health insurers. Health insurers worldwide find themselves challenged: society is aging, prevalence of diseases such as obesity, diabetes and other chronic conditions are increasing, the costs of health systems are exploding and social trends pose new and major challenges.. At the same time, developments in digital transformation, connectivity and artificial intelligence are advancing rapidly. This creates attractive opportunities for health insurers – and the prospect of a new key role.
Dealing with type 2 diabetes: today and in ten years' time
Type 2 diabetes usually occurs in people over 40 years of age. Apart from hereditary factors, overweight and lack of exercise are regarded as central risk factors.
Today, the health insurer only comes into play when the disease has already broken out, a medical diagnosis has been made and medical intervention must be paid. The health insurer of the future, in contrast, will have to interact with his client by providing him with a virtual coach, which is based on artificial intelligence and which can continuously analyze the insured person's health data from various sources. It recognizes pathological developments at an early stage and can initiate individual preventive measures.
Today, the health insurer usually assumes the function of the payer. The management of the disease is based on the care provider’s medical recommendations for a healthier lifestyle and the prescription of medication. However, changes in lifestyle often fail due to the lack of patient discipline. In the future, the health insurer will have to actively support its customers in the prevention and treatment of diseases. The virtual coach monitors the current health state as well as its course. With the help of gamification elements, the insured person can significantly improve his/her nutritional and physical activity behaviour as well as lead a sustainably healthy life.
Type 2 diabetes can substantially reduce the quality of life of those affected, lead to serious complications and shorten life expectancy. This results in high costs for the service provider. The insurer of the future, however, will have the opportunity to prevent the outbreak of some diseases through prevention: not only to reduce costs, but also to offer its customers something most valuable: additional years of life, in good health.
Design principles for the digital insurer
The conventional health insurer cannot meet the requirements of the scenario described above: it has to modify its position for the future. The following design principles can be derived from this example:
The focus is on the customer and the customer experience. To achieve this, the insurer must foster a culture of innovation and rely on creative, intrinsically motivated employees.
All processes in the value chain are triggered on an event-based basis. They are digital and mainly automated. This results in round-the-clock availability, with data being processed in real time.
Processing and decision making based on large amounts of real time data is only possible with the latest technologies. These include cloud systems and artificial intelligence.
The scenario of type 2 diabetes shows that the insurer of the future has the possibility to play an active and controlling role. This benefits insurers and policyholders alike. However, this step will only be successful for insurers that are ready to apply and submit to the corresponding design principles. Those not doing so will remain in the role of a pure payer: they will miss the chance to keep their costs under control, effectively and for the long term. Finally, they run the risk of missing the competitive boat and slipping behind the Amazon, Google and Apple of this world.