The Digital Insurer — incentivizing health through technology enabled programs
Today’s average life span is rapidly increasing and the process of aging seemed to be postponed. Our civilization is no longer concerned about health issues that troubled our ancestors. Tuberculosis, polio, cholera — what was deadly two centuries ago, is easily curable with available medical advances of the XX century.
This, however does not mean, we are no longer free of medical threats. Epidemics of the 21st century is invisible and total. According to World Health Organization, chronic diseases, such as heart disease, stroke, cancer, chronic respiratory diseases and diabetes, are by far the leading cause of mortality in the world, representing above 60% of all deaths. The more developed society, the higher the percentage of lifestyle related deaths.
This trend is causing massive pressure on companies operating in a Life and Health Insurance space. The market has observed an increasing number of claims due to chronic diseases. The ability to work and the quality of life is affected. The customer is turning to an Insurer for money. Finding a way to reverse this trend is crucial to maintain profitability and keep presence in a market.
A lot of traditional operating models in the financial services sector did not account for human irrational decision making — choosing pleasure and the comfort of habits over long terms benefits — and were not able to predict the very slow and incremental penetration of lifestyle related diseases.
Emerging new business models reevaluated these assumptions and take into account that humans value short terms gratification over long terms rewards. These models are ready to challenge this and change the way insurers interact with clients preventing them from making a bad health related decisions…and once again technology comes in handy here!
Activity tracking wearable devices enable to gather data about user’s behaviour, analyze and detect health issues before they become health problems. This simple feature can help build big science backed wellness rewards programs that can be used by insurance companies to incentivize their customers to live a healthier lifestyle.
In K2 Digital Ventures we look at startups that together can deliver a comprehensive, sustainable business model that can enhance insurance offering and drive profitability in a longer run.