Trends in lifestyle changes and their impact on insurance

The most common joke we would make as I started my career in the insurance industry used to be “it is too bad that the customer survived”.

We’ve come a long distance since those days, and our understanding regarding insurance coverage is greater. Does this have changed the way we think of  life insurance? Do customers really want the money from insurance instead of the chance of not needing to file claims?

Lifestyle choices, and insurance A symbiotic connection

The growing desire of Gen X to live a healthy lifestyle will help insurers achieve their goal of reducing payouts for claims. If decreased claims reduce premiums that is an all-win-win situation for both the insurer as well as the insured.

Insurers can promote healthy lifestyles in those who are insured by providing these methods:

  • Utilization of wellness programs to encourage healthy behavior.
  • Insurers are partnering with fitness and health providers, thereby giving access to services at lower costs.
  • Insurance companies offer incentives to policy holders to improve their health through cash rewards e.g. discount flights or free calling, and so on.
  • Some insurance companies offer discount on renewal premiums. This can also increase the likelihood of a renewal.

What’s driving this change? The primary driving factor is the evolving system in which the insurer and the insured operates. The major reasons for this are:

  • aligning interests between the insured and the insurer.
  • Awakening the general public to maintain a healthy lifestyle.
  • The wide-spread use of smartphones and the innovation in wearable.
  • The desire to develop an integrated framework to integrate big data.
  • The need to differentiate and more appealing propositions in the context of protection and accident and Health products are becoming more important.

technology as driver change driver

In large part, the transformation is driven by the effects of technology on the life and health insurance. Today, insureds have greater control over their health due to technology advancements.

  • Education Resources

Patients search for information on illness and diseases by entering symptoms, diagnoses, medications and other procedures into probabilistic databases to determine the cause as well as the treatment plan(s). Patients can utilize smartphone apps to make a request to the doctor and investigate ailments and receive immediate answers.

  • Social Networks

Patients Like Me and Cure Together can help to create a community where people can share symptoms and to compare them with others who share similar symptoms, and the same treatment program that they follow. Patients can search for symptoms or symptoms, treatment success, prognosis and create a personal connection to the treatment regimen

  • Kiosks are becoming increasingly being used at retail locations

Kiosks provide health and wellness information and tests for obesity, Vision/Blood Pressure Lifestyle habits, family background and may also arrange for a video consultation with a doctor.

  • Fitness, Diet and Exercise Monitors

Activity apps such as Map My Run or Run Keeper, which record your actions like running, walking and cycling. Also, you can use nutrition-related apps to determine details about the nutrition and calories in restaurants and food items, etc. Many weight-loss apps rely on social networks to help achieve their objectives. The trend of wearable devices allows for monitoring the physical activity of a person in real-time.

  • Health Measurement and Disease Detection at Home

Technology allows for remote diagnostics and monitoring of clinical conditions, and patient support.

The evolution of the insurance operating model as well as the value-added proposition

Insurers are implementing a totally new approach towards health risks and health services as well as a fundamentally different value idea

Potential risks and potential inhibitors for the model’s new version

The new model comes with associated risks and advantages. Making the switch to the old business model is not going to be a simple task. It is entirely dependent upon data and the capability of insurers to gather the, analyze and store this huge amount of information in real-time and incorporate the information into their decision-making and operations. Insurance companies face a daunting task to move away from their outdated technology and adopting new technology that can help support this data-driven business model.

In addition to the technology-related obstacles insurers must also be aware of other issues , such as anti-selection and privacy issues posed by regulations and, most importantly, the skills required to adapt an operating system that is new.

The way forward

The success of this model and continued value creation depends on factors such as creating an integrated ecosystem of insurers as well as technology and insurance providers such as wearable makers. Additionally, important include the evolution of technology within insurers, making it possible to join other companies within the ecosystem. Another crucial aspect to take into consideration is the ongoing value creation that will allow the insured to consider staying in the program.