Insurers have yet to unlock digital health's full potential

by Leo Almazora21 Dec 2020

As the COVID-19 pandemic led to a marked acceleration of digitalization across the world, life and health insurance companies have tightened their embrace of technological solutions.

Aside from providing for simplified underwriting and non-medical products, insurers have increasingly offered support to their members through digital health solutions. But despite this groundswell of uptake, much of digital health’s potential value to the life and health insurance industry remains untapped.

According to a report titled Digital Health: Is the euphoria justified by the Geneva Association, the literature on digital health suggests it can play a beneficial role across different areas of the insurance value chain, including:

  • Marketing and distribution;
  • Underwriting;
  • Consumer engagement;
  • Managing providers; and
  • Claims processing.

In a survey conducted to complement the literature review, insurance companies cited a raft of opportunities that digital health can offer. Aside from enhancing their client base by penetrating untapped markets and improving customer satisfaction, they said such applications can turn health into a daily fixture of people’s lives and enable real-time, accurate data collection. Advantages like cost reduction, claims management and control, and product diversification were also cited.

However, the majority of digital providers surveyed by the Geneva Association shared a belief that digital health had not yet been optimized across the patient journey. Aside from a lack of integration, they said customer engagement was limited by disjointed systems with breakpoints between apps, human clinicians, and health services.

Underwriting effectiveness was rarely mentioned by insurers,” the report said, suggesting that insurers might have other priorities with respect to digital health or face data interoperability challenges. “It may also reflect the challenges posed by data interoperability … and the need for new talent and comprehensive investment in time and human resources to make a substantive move in this direction.”

Respondents to the Geneva Association survey also cited barriers and risks to the effective implementation of digital health. For insurers, the internal barriers included slow adoption by distribution channels; challenges in integration between processes and IT interfaces, including a lack of digital engagement platforms from leading insurers; and limitations on data analytics and secure data management.

External barriers, meanwhile, included a lack of confidence and trust and digital health, most notably among older people; access to data, data sharing, and security concerns for customers; and the risk of an expectation-reality gap among consumers, who may use their experiences with other industries as a benchmark to evaluate digital health platforms.