THE INSURTECH DISRUPTION AND WHATLIES AHEAD

INSURANCE

The insurtech disruption and what lies ahead

Dr Suman Katragadda,Founder & CEO,Heaps.ai explains how technology can make health insurance truly accessible to as many people as possible and better the country’s overall healthcare ecosystem

We know that over the past decade, technology has been a disrupting force across industries. It has created new ways of doing business and transformed previously stifled industries. This is especially true for the insurance industry which has witnessed a boom in tech intervention, resulting in the concept of insurtech. A combination of two words, insurance and technology, insurtech continues the trend that was started by fintech and applies it to the insurance sector. The health insurance segment has particularly benefited from this tech-led surge as estimates suggest that nearly 672 million Indians will be covered by health insurance by 2025. However, these numbers still account for less than 50 per cent of the country’s vast population. Hence, the questions that now remain are-how can technology make health insurance truly accessible to as many people as possible and can it better the country’s overall healthcare ecosystem? Most insurtech players today are focussed on providing aggregation services that aim to improve discoverability and accessibility. Such platforms measure success based on the volume of services pushed out to the public and a lot of focus is placed on marketing and ad campaigns. Hence, there is little to no innovation taking place when it comes to truly disruptive change such as creating models that leverage the power of digitisation, AI and machine learning to connect hospitals with insurers. Currently, insurance processes and patients’ hospital records are still heavily paper-based, making the entire industry archaic and slow-moving. Claims adjudication, insurance underwriting and all other related procedures continue to be fairly manpower intensive. This has led to a lack of customisable pricing, real-time data, and speedy processing of claims, resulting in an overall trust deficit between insurance providers and customers. In order to change this, insurance companies have to place a renewed focus on developing their middle office.

Currently,insurance processes and patients’ hospital records are still heavily paper-based, making the entire industry archaic and slowmoving.Claims adjudication,insurance underwriting and all other related procedures continue to be fairly manpower intensive

The insurance middle office and whyit holds the key?

Traditionally, insurance front offices work on marketing, ads and sales campaigns, while back offices work on processing insurance papers trails and other administrative processes. However, most companies do not have fully developed middle offices that can function as value-added centres. Middle offices have the potential to work as nerve centres of insurance companies because they can work to manage the risk of policyholders better and minimise unnecessary claim payouts. How can this be done? The simple answer to this question is by assessing each patient individually and analysing their case history, medical conditions and hospitalisations in a thorough manner so as to determine differentiated risk.

Complex patients, patients with at-least 3 or more chronic conditions, account for majority of the claim payouts for the insurance companies. These are the policy holders who typically have a lot of care gaps and also have higher incidence rate of hospitalisation. If insurance companies can invest into developing analytical engines that can give an idea of a patient having such care gap proactively, suitable interventions can be initiated to ensure the care gaps are addressed and eventually control the rate of hospitalisation as well to get down the overall claim payouts.

Insurance companies are, thus, in need of leveraging a new kind of insurtech - one that will use technology to do more than just aggregate and compare policy offerings. It needs to develop superior tech-enhanced capabilities that can form a thriving middle office, thus leading to connected models that are capable of communication and data interpretation. Only then can insurtech create a true revolution in India’s healthcare ecosystem.