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Insurtech Funding A Catalyst for Digital Health



A few recent developments in health insurance are noteworthy. Two of these were sizeable fund raises, distinctive from general trends. The third saw a large insurer unveil its ecosystem roadmap.

The events in discussion are:

Notable 2020 achievements:

Over the past decade, health insurance has seen unprecedented growth. While US has the largest share, emerging markets saw 20% annual growth. Still, 400 million people lack access to essential health services, mostly in Africa and South Asia. The key trends driving growth are ageing populations, robust health infrastructure and rising incomes.

We are headed towards a dramatic transformation in healthcare, arising from two tectonic shifts: a) the need to reign in runaway cost inflation, which is triggering innovation in incentives and payment structures, and b) digital health, which is democratizing data and empowering consumers.

Payers, which include health insurers and government agencies, are perceived as critical drivers in this transformation. As they hold the purse strings, a domino effect is triggered on business models of others in the space. For instance, payers’ initiatives to reshape economic incentives has driven providers to reorient business models to outcomes-focused metrics and empower patients with digital health aids.

Digital health uses data and technology to treat patients, educate healthcare professionals, track diseases, monitor health and influence healthier lifestyles through prevention. Some of the key trends include:

These developments present a unique opportunity for insurers and their partners to ride the next wave in healthcare innovation.

Current underwriting practices rely on single point-in-time risk assessments. There is scant knowledge available on policyholder health subsequently. Utilizing digital health platforms, insurers leverage behavioral psychology and offer customers personalized wellness programs linked to a system of rewards and recognition and in the process, build insights on policyholder health.

South African health insurer Discovery is one such example, having made great strides through its Shared Value Insurance business model. The carrier has partnered with leading insurance groups around the world, each of which incorporates its Vitality platform into their business model.

Another recent example is smart-tech enabled platform GOQii that launched connected health hardware (ECG equipped smart watch, treadmill and weighing scale) with insurance cover. Partnering with Bajaj Allianz GI, the two offer users healthcare with benefits tied to preventive health metrics.

Wellness platforms with associated devices are becoming key mechanisms for data exchange between consumers and providers. For better health outcomes, these present a fuller picture by combining user health and fitness data with official records from health professionals and minimize health risks. Insurers who align themselves and offer personalized health delivery through partners and platforms can unlock untapped value and deliver differentiated customer experiences.

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