Technology continues to shape the way we live, work and, in recent years, also how we play. The world of insurance is no exception to these constant technological innovations.
Adapting to these changes has meant that the life and medical insurance industries have had to alter the way they do business. The development of more attractive, innovative and personalised products and services are on the rise, in order to retain and attract new customers.
“With advances in wearable technology, such as smart watches and health apps, more and more insurance companies have access to their clients’ data with client consent, and therefore the amount of risk they apportion to each individual has changed significantly,” says Vera Nagtegaal, the executive head of Hippo.co.za.
According to McKinsey & Company’s report “Insurance 2030 – the impact of AI on the future of insurance”, technology is shifting the role of insurance companies from “detect and repair” to “predict and prevent”.
“As the majority of lifestyle diseases such as diabetes and cardiovascular diseases can be prevented by simply leading a healthier lifestyle, the ability to identify health risks from an early stage through new body monitoring technologies is giving life and medical insurance providers insights into customer behavior and is able to use this data to help steer them on the right course,” explains Nagtegaal.
Insurers are also now able to personalise their offerings to fit the customer’s profile and the new concept of ‘pay as you live’ life insurance aims to reduce premiums and reward customers.
“This new insurance model gives life insurance providers the power to reach new markets and offer adequately priced products that cater for the needs and lifestyles of people they previously could not accommodate, simply because understanding their risk profile was too difficult,” Nagtegaal says.
Lower healthcare costs and sophisticated insurance models could also give insurers an opportunity to tap into the underinsured market.
Nagtegaal says that, for insurers, getting clients to live healthier lifestyles contributes directly to their topline because it reduces the incidents of claims related to health issues. “Aligning the idea of a higher quality of life for clients, while reducing claim costs means that both the insurer and their client benefit.”
New medical and wellness technologies can benefit users by improving fitness and boosting personal health, which as a result could lead to reduced healthcare costs, lower insurance premiums and increased life expectancy. By applying the data received in medical screening processes, life insurance providers are able to reduce the premiums of policyholders.
“Insurers can now incentivise healthier lifestyles by awarding clients with points and other rewards for reaching their health and fitness goals. These rewards can often be translated into a financial saving for clients,” says Nagtegaal.
Other benefits include improved engagement between insurers and clients, as well as increased customer satisfaction.
“Insurers must be able to engage with existing and potential clients by addressing their most pressing needs and risks, using platforms that matter to them – a reason why fitness apps on mobile phones are becoming a great platform for service providers to connect with their clients,” concludes Nagtegaal.