A global crisis such as SARS CoV2 affects business sectors across the world – and some unique considerations create a huge impact on the medical insurance industry as well. So, how is the global insurance sector likely to shape up to the unfolding crisis? What are the concerns across the different segments of the health and life insurance? And what digital trends might the pandemic serve to usher in for the future?
Retaining the customers during the pandemic will largely depend on the insurer’s and business’ ability to remove the impediments that costumers are facing throughout their buyer’s journey at all touchpoints.
Read on to understand more about COVID-19 exposure, and how to position your business to be resilient to the situation and prepare for the future.
This statistic showcases the digital health market size forecast worldwide in 2019 and a projection for 2026.
According to this forecast by Statista for a survey conducted in June 2020, the digital health market is likely to rise six times by 2026 i.e. 640 billion USD approx., with an expected CAGR of 28.5% from 2020 to 2026.
As per Statista reports, even the global telehealth market has grown significantly between 2015 and 2020. North America is one of the largest telemedicine markets globally. And by 2025, the U.S. telemedicine market is estimated to become 35 billion dollars.
Cloud and Digital Transformation – a New Landscape is Coming in the Insurance Industry
Amid the ongoing pandemic, one of the major challenges that businesses across sectors faced was enabling the mass transition to remote working. In the health insurance industry, this was one of the first and most visible hi-tech imperative created by the outbreak.
This global pandemic presents an unparalleled challenge, which requires complete digitization of the industry and can have a long-lasting impact beyond the current environment.
In the general and life insurance sector, the degree of challenge varies quite widely between different carriers. Some are found to be in a better position than others in embracing the change effectively, with digitally savvy and enabled remote working staff. For some companies, it seems to be quite a task. But for all of them, it is something that simply needs to be accomplished. One way in which insurtech startups can assist with COVID pandemic is by going online and providing digital to its customers.
So digital is no more about technology, it is about the customer. It is about reducing communication barriers and optimizing easy engagement. And Insurtech can achieve this with the help of AI and Chatbots along with big data analytics.
Opportunity to Embrace the Hi-Tech Future
The changing times have been thrust upon the Insurance industry. We can see that the COVID-19 pandemic has become a catalyst for digital solutions worldwide. Insurance providers that have comprehended the challenge and have leveraged fully flexible ways of working are likely to position themselves for the Digital Future. And those who have not made adequate investments to maintain digital workflows, tools and new processes might fall behind and even after this crisis dispels this will continue to be disadvantageous for them.
As a result, the current challenge that needs to be overcome is embracing of the digital future by the workforce at a much faster pace, and achieve something that would otherwise take years, within few weeks and months. This COVID-19 pandemic poses both threat and opportunity.
The Global Perspective
In India, where the conventional business models have long dominated the insurance sector; but, recently, the sector also is witnessing some intermediaries, aggregators, and new insurers leveraging digital infrastructure to increase the health insurance penetration.
The increased usage of internet has pushed the insurance providers and aggregators towards digitalization and the Insurance Regulatory and Development Authority of India has already put in place an extensive framework to standardize the distribution of health insurance online, telemarketing, and digital marketing modes. As more and more people prefer to buy health insurance plans online, adapting to the need of digital transformation will decide the survival for the most of the Unicorns and even new business players.
In July 2019, the Insurance Regulator introduced the Sandbox Regulations, to introduce innovative fin-tech and insure-tech solutions. Under the sandbox regime, proposals have been made for online automotive claim, AI-based claims estimation, and health profile-based pricing, have been approved for testing.
The pandemic situation has reinforced the popularity and usage of e-consultation portals like Ping An’s Group Doctor, that has seen 900% growth since the COVID situation began. Another upcoming trend there is mutual aid claims, in which customers pay small fees to belong to a collective insurance service – with some 300m members.
The country’s insurance sector is already technologically advanced – but other nations or areas that have been following the paper-based approach need to prioritize digitization in the wake of the ongoing situation. Digital sharing of videos and image for claim assessment and processing needs to be streamlined across all the economies of the world.
Italy and the UK
In Italy, most of the insurance agents follow a traditional face-to-face approach with the customers, but now had no choice but to adapt to the digital methods. Before this, 85% of the market share was held by agents and brokers in the non-life business sector, whereas, the direct channels never hit the double digits. Health insurance comparison portals in the UK are also witnessing an upsurge in demand and insurance-related queries. To ensure customer reach innovative digital methods are being implemented in an effective manner.
A new study from WalletHub reveals that the Insurance rates across the different states in the U.S. vary considerably. Texas shows the worst rates with nearly 18% of uninsured people. Whereas, Newton, MA; Fishers, IN, San Ramon, CA show the best insurance rates. The data indicates that access to insurance remains divided in the country and needs further reforms. The situation can be a game-changer, especially in the health insurance market, imposing huge shifts in how the businesses are done. The technology was there, but it was never this disruptive. The current pandemic situation has brought in the need to embrace the change.
AI and IoT to Streamline the Insurance Processes Worldwide
Through Artificial Intelligence, the use of Internet of Things (IoT) and Big Data Analytics, insurance providers can significantly streamline and enhance their processes:
- Insurance Pricing: It will become real-time, and dynamic with behavioural induced models
- Customer Interactions: Provide personalized customer experience remotely with voice and text messaging via chatbots
- Underwriting: Speeding up the customer’s profile risk assessment and data collection
- Claims Handling: Advanced algorithms to handle initial routing and drones replacing the first notice of loss
- Fraud Management: Enhanced forensic interrogation and analyzation will prevent fraudulent transactions
As challenging times these might be, there is still plenty of light at the end of the tunnel!
The writing on the wall is clear, post-COVID-19 the future of the insurance sector lies in the Insurtech partnerships, Artificial Intelligence (AI), Internet of Things (IoT) and how insurance providers adopt technology in these unprecedented times will be crucial to their future growth.