ITIJ 214, November 2018
David Kernek asks how insurtech startups and other disruptive advancements are helping the industry in its goal of providing tailor-made products to an ever more demanding customer
Do tech startups – the dreaded disruptors – have an inherent advantage in the travel and health insurance industry’s search for made-to-measure and add-on products? After all, they’re new, lean and unencumbered by the weight of accumulated experience that can stifle risk and creativity in large, long-established companies. Evidence presented at one of last year’s International Travel & Health Insurance Conferences (ITIC) by Spain-headquartered Coverontrip’s CEO Rafael Senén carried a warning for the sector’s big beasts. He noted that, while many insurers realised the market was changing, only 36 per cent believed that insurtech would disrupt it with new products and services in the near future, and cited a 2017 industry survey, which found that only one-third would be focusing on the evolving needs of consumers in 2018.
“Most insurers,” Senén said, “are still selling the same policies as they did 20 years ago, but customer needs are changing, and tailor-made policies will be more sought after. If we do not start disrupting the industry, others surely will.”
Seeing which way the wind is blowing
A big beast that not only saw that the market was changing but also moved to meet the challenge was Generali Group. Was it deterred or held back by its size and corporate load? No – it created its own startup in 2015, Generali Global Health (GGH). “Our business started as, really, a corporate startup within the group in 2015 to look at customer needs identified by a number of people, including our CEO, Marco Giacomelli,” said GGH’s Business Development Manager Darren Fletcher. “They were the needs of what we call the globally mobile customer, from a medical perspective beyond domestic private medical insurance and what national healthcare in many places delivers. As a startup within a very traditional and long-established group, with its backing, infrastructure and investment, our bespoke products and systems have been built with a real focus on customer needs. Because we have that startup mentality, we are constantly reviewing the market to see what services are available, and we are very fast – we can do it in months – in delivering to the market once we’ve identified them. Just like the small startups we work with, we are very nimble. We can get things done at a faster pace than some more mature organisations can manage.”
Most insurers are still selling the same policies as they did 20 years ago, but customer needs are changing, and tailor-made policies will be more sought after
Most Generali Group business, he explained, are focused on particular countries, but GGH was conceived from the start as an international business, with hubs in London, Hong Kong, Dubai and Madrid.
Making it personal
On the subject of personalised cover, Fletcher explained that, historically, in the wider market that just meant a three-plan choice, starting with relatively cost-effective cover and rising to something more comprehensive: “Beyond choosing what level you want, you don’t get much say in what’s included in that cover. That’s driven, largely, not because people have neglected customer needs but because systems couldn’t cope with much more complexity than that. Our system was able to develop a modular product, which means our members can choose from three inpatient plans and three outpatient plans, and then add extra services such as maternity, for example.” Maternity is quite a powerful add-on, he told ITIJ. “When it’s built into one of the fixed plans you might see in the market, the cost is spread across a group of people who might not ever use it, but being able to add it on means we are saving costs for those members who do not wish to use it. We’ve seen in other companies a situation where you have a group of 10 male engineers working on an oil rig, and wanting the top policy, but that policy would include maternity cover they were never going to use.”
Everyone, according to Fletcher, is working towards personalisation. “It’s a trend we see in almost every aspect of our lives,” he said. “You can personalise almost anything. Innovation, particularly in the insurance sector, has been slower than other industries, but providers are focusing on accelerated innovation and personalisation now. Yet changing systems is a big process, so we’ve got a head start.”
So, who are the globally mobile people whose special requirements were spotted by Generali? “They fall largely into two categories,” Fletcher explained to ITIJ. “The person who is going somewhere abroad for work, either as an individual or an employee, and those who want to travel overseas to get better medical care, and that might especially be the case in parts of Africa, for example, where you’d want to go to a centre of excellence to get the best care. There are quite different needs across those two groups. So, we have different products, which we can tailor by geography: do you want cover for the US, for example, or for just Europe? We’re not saying you have to take global cover if that’s not what you need. And cover can be tailored to different populations within a group. An HR director would be able to look at their different populations and their different needs and tailor cover down to segments of three employees, and say we want cover configured this way for these three members and that way for others.”
GGH creates tailored products by combining its medical insurance services with skills provided by technology partners. Such products include an employee assistance programme, offered in partnership with Morneau Shepell, comprising counselling services via app, video and telephone specifically for international employees and travellers; and My Digital Doctor, with Advance Medical, a Generali Global Health-branded app through which members can access a doctor from anywhere with a mobile phone signal. The company is also partnering with TicTrac to launch BRIA, a wellness app that enables members to track their healthy habits and exercise routines, and it currently has two other additional services which are less technology driven: “One is a second medical opinion service,” said Fletcher, “and the other is genetic testing after diagnosis for cancer, which tells you what the best treatment is. That’s arguably the ultimate tailoring of the customer experience: it looks at the cancer’s genome. From a cancer perspective, it’s less now about where the cancer is, it’s more about the genome of the cancer; one person’s lung cancer could be completely different from someone else’s.”
The times they are a-changin’
The health insurance industry, according to Aetna’s Senior Vice-President, Customer Propositions, Caroline Pain, is at a tipping point now. “It’s undergoing a transformation that’s being led by changes in healthcare delivery,” she told ITIJ. “The status of tailored products right now is typically more attuned to the distribution channels that are being used. The majority of insurance products are still sold either direct to corporates – and that’s a pretty small proportion – or through insurance brokers and, as a result, the shape of the industry’s product set has been largely configured to suit the needs of the corporates. The large-group insurance products are highly tailored, but they have been tailored classically for them. What’s happening now is that as healthcare undergoes transformation, becoming more consumer and technology-led, insurers have to respond to that and be able to deliver products that cater to the needs of the insured member as well as the corporates.”
Until recently, she explained, IPMI products were shaped by distribution: “But the demand now is for insurers like us to be able to support people in the workplace with preventive care instead of always sick care. That’s a part of the transformation; healthcare delivery was focused on episodic, acute and chronic care management – by which time, obviously, the patient is already ill – but now we’re moving toward a different world in which technology is unlocking the potential to be able to deliver proper, personalised, preventive care for people.”
The health insurance industry is at a tipping point now
A major aspect of preventive care is engaging with patients on a personal level in order to change their mindset, said Pain. “You are not going to change someone’s behaviour overnight,” she told ITIJ, “but what you can do, using technology such as Apple watches, is provide timely nudges: things you know have worked for them in the past, things you know have worked for other people at similar life stages and with similar health conditions. The nudges can be physical. A lot of these devices will set off a vibration if you’ve been sedentary for too long; if you’ve been sitting in front of a laptop for hours, the watch will vibrate and make you get up. It’s about bringing that mindfulness into the moment, to make sure people are working on the things they said they wanted to work on and not retrospectively sending them a report saying they should have walked more last month.”
Aetna has, according to Pain, pinpointed two significant trends: the growing awareness of the interface – in both directions – between mental and physical health, and the ‘massive’ growth in cardiovascular disease, hypertension and mental health problems. “These are, to a degree, classic conditions of lifestyle, but they’re also things that have at least in part a genetic element,” she explained. “In newspapers and on the internet, you see advertisements for some of the big consumer genetics companies such as 23andMe and Ancestry.co.uk. This reflects an interest in precision medicine and precision care, with people wanting information that’s about ‘me’, not people like ‘me’, not people of exactly the same age, not people who live in England. They’re asking: what are my unique circumstances? What are my unique needs, what might they be in the future, and how might they affect my family? These trends together are driving an interest in technological solutions – a lot of the healthtech startups are in this space – and fueling interest among consumers. One of the big genetics consumer companies sold a million tests on Black Friday last year. It’s becoming mainstream, and it’s leading to a couple of other trends we see around health literacy with the more informed consumer driving demand. You see people going to their general practitioner with a genetic test report and data from their home cholesterol tests, their blood glucose readings, their blood pressure monitor, and their wearables. There’s a huge proliferation of data, which is given to the doctor, who says: ‘Now what do I do?’”
So, what happens to all that data? Is it available when and where it’s needed, especially by corporate employees overseas? Is there an insurance product for them that can be made-to-measure? “You read a lot about electronic health records and personal records,” said Pain, “but much of this data isn’t integrated. At Aetna, we’re building over time what we call a portable healthcare system that brings together the data that members have about themselves and the data we hold for them about their interactions with healthcare systems. We serve many people who move between countries, and they often don’t have access to their health records. If you don’t have an integrated healthcare record, this is when mistakes can be made. You might be diagnosed with something that had previously been tested for and ruled out. You might be prescribed or over-prescribed a drug for which there’s a contra-indication, or you might be given an additional CT or MRI scan when it’s not needed, because there’s something in the data that’s been missed. So, integration and portability are really important parts of the proposition for individual consumers and corporates. There are regulatory boundaries and barriers to be addressed, but potentially it enables health data to cross frontiers, and puts the member back in control.”
Customers, she continued, want to do genetic testing, they want to do cholesterol testing, they want to understand what’s going on in their own bodies and, Pain suggested, it’s not too much of a jump to see they also want control of the data that’s held about them. “We, obviously, then want to be able to use that data – with their consent, of course, if they choose to give it – so that we can work with them and offer the right health services and support at the right time and, we hope, prevent them getting into a chronic condition that is debilitating mentally and expensive for the patient, and obviously also costly for the insurer.”
Meet the new paradigm
According to Pain, current healthcare trends and concerns date back to the 1950s and the pioneering work of the French immunologist and Nobel prize winner Jean Dausset, whose research laid down principles that were later reflected in the Human Genome Project and contributed to what’s known as the P4 medicine model, the four Ps being predictive, preventive, personalised and participatory.
“They’re the cornerstones of the propositions being developed now,” she told ITIJ. “It’s back to the future! Technology is actually making this real now. We embrace healthtech startups. One of the things many of them are brilliant at is building consumer engagement platforms. What we’re great at is building the insurance element of that proposition, making sure the funding and distribution mechanics are in place, so we’re going to see more partnerships between the traditional insurance world and the healthtech one. The two are complementary; it’s a winning combination.”
Having designed cover for niche interest and activity groups – such as amateur photographers, hill walkers and bird watchers – travel insurers are looking to technology in the quest for even narrower traveller categories. “As data becomes ever more available and segmented,” said Greg Lawson, Head of Travel Insurance at Collinson in the UK, “it enables travel insurance providers to gather more information about individual customer travel plans than ever before, allowing us to provide more specific, tailored insurance offerings. For example, when insurance is offered within an airline or via an online travel agent booking path, there is a wealth of travel booking information available to create these tailored solutions without using any directly personal data. Not only does it allow us to tailor a more suitable product, it also presents an opportunity to show dynamic imagery and messaging tailored to the customer’s trip which enhances the overall booking experience, makes the insurance offering much more engaging and increases the chance of conversion.”
Rajeev Shrivastava, Founder and CEO of VisitorsCoverage, explained to ITIJ that the industry is on the road to greater policy personalisation – but adds a note of caution about its date of arrival. “Technology certainly has the capability to completely transform the insurance industry,” he said, “and in many ways we’re already starting to see this disruption. The growing interest in the insurtech industry is a prime example of this. Many aspects of the insurance industry are based on technology – such as data science and business intelligence – but I think there is a hesitance among key insurance industry players to harness innovative technology to its fullest potential. The insurance industry is just starting to receive attention in the startup world, both from entrepreneurs and venture capitalists. This is disrupting a century-old industry, causing many of the key industry players to re-think their products and strategies. Overall, this is an exciting time to be a part of the insurtech industry. With so much potential to innovate and improve, change is inevitable. Consumers and the industry have a whole lot to gain. The more we grow technologically within the industry, the more companies and consumers alike will benefit.”
Data-driven technologies, he explained, are already allowing insurers to make better, more informed decisions more rapidly and efficiently than before: “These technological capabilities, along with artificial intelligence, certainly have the potential to help insurance companies create more customised products on an on-demand basis. It’s always been the strategy to create one-size-fits-all products that fit many different needs, but this strategy doesn’t work for everyone. With the help of technology, it’s within the realm of possibility that a few years down the road we could start seeing entirely customised insurance plans and benefits based on the unique and individual needs of each consumer.”
Lawson served up a few examples of personalisation, along with a caveat suggesting that enthusiasm for bespoke cover might need to be tempered. “Data and technology share certain trip characteristics,” he said, “creating a travel persona and serving up the most suitable product for that persona, based on past conversion and transactional experience. For example, a customer flying to a city airport for a midweek trip without checking in any luggage is likely to be travelling on business and the system will therefore serve up a product (and messaging and imagery) with business-specific benefits, including gadget add-ons. This type of tailoring provides individual customers with a valuable and usable product more suited to their needs. That said, to ensure that it is not a negative experience, an alternative generic product should also be offered alongside the initial offering in case the first option is not suitable. In addition, the use of geo-tagging and location-tracking is enabling insurers to consider how to offer insurance directly related to where the customer is at that time. When arriving at a ski resort, if the customer appears not to have any ski insurance, it seems sensible to send a push-message to them to offer an upgrade at that time.”
However, he warned, with GDPR and increasing regulatory oversight ensuring customers receive appropriate messages and that they make an informed and active choice for any insurance cover, especially add-ons, the technology is an enabler but not the whole solution: “With digital experiences often requiring less visual real estate to work with, and conversion pressure centred upon speed and ease of purchase, it is essential to find the balance between innovation and meeting the regulatory requirements without one smothering the other.”
Exploring new routes
New distribution channels, said Lawson, are analysing data to better personalise the user experience and increase customer retention, basket value and, ultimately, brand advocacy, which in turn cuts acquisition costs. It could be a ride hailing company wanting to offer gadget and baggage cover while tracking customer travel duration, or a hotel chain offering cancellation and delayed arrival benefits as part of its booking purchase path.
“Collinson is already working with brand partners such as Columbus and easyJet to personalise the product offering,” he told ITIJ, “and we are also looking to improve the user experience while travelling and, if necessary, when making a claim. Whether it is our SmartDelay product that delivers a real-time lounge access benefit in the event of a one-hour flight delay, a customer portal allowing pre-travel country-specific health and security advice, the ability to talk to a UK doctor by phone or video and get a prescription issued locally in hours without leaving your hotel room, or tracking customers via Wi-Fi hotspots to be able to push a safety message in the event of a major incident – they are all increasing the value of travel insurance providers as well as creating more touchpoints to help prevent or manage when things go wrong.”
New distribution channels are analysing data to better personalise the user experience
Having started this survey of what’s happening on the not-always-smooth path to highly personalised cover with Coverontrip’s Rafael Senén, he wrapped it up with his thoughts on what’s possible – and on what might not always be desirable. Narrowing cover down to sub-groups and individuals, he explained, can sometimes be easier said than done.
“It’s not easy if you use the usual technology of databases and acquiring knowledge based on queries,” he said. “The truth is that, nowadays, customer segmentation involves the use of artificial intelligence that learns and allows you to draw conclusions from the combination of the few elements requested of the client when offering travel insurance. Keep in mind that, especially in the acquisition of online consumers, the entire journey is designed to let him or her enter as little information as possible, to speed up the sale and make the experience friendlier. Logically, the less information you collect, the more difficult it becomes to know the client’s tastes and characteristics. On the other hand, from the point of view of underwriting, travel insurers tend traditionally to create products and tariffs for large blocks of circumstances. The destinations and ages are grouped so that, in the end, personalising too much becomes difficult. And it’s not because insurers do not have the information; they have very complete historical data. The problem, sometimes, is what you do with that information.”
For individuals, said Senén, specialisation is about the offer of non-packaged products, permitting clients to choose the products and coverages they need: “I am not very supportive of this solution because I believe it is the responsibility of the professionals to advise and offer adequate products and not to delegate this important issue to the insured, who does not have enough knowledge to put together cover that protects them adequately.” ■