Insurers to Turn Fintech Players

Insurers to Turn Fintech Players

Covid-19 may be a black swan event, but health insurers are preparing by casting a wider net by using technology to expand their reach

Illustrations by Nilanjan Das Illustrations by Nilanjan Das

Large-scale health catastrophes aren’t new. The world has already witnessed a series of epidemics, including SARS, MERS, Ebola and Zika. But Covid-19 is different, a pandemic that swarmed the planet at one go, leaving no place for us humans to take refuge. Certain developments over the years allowed the virus to spread far and wide.

On one hand, we root for interconnectedness, to make the entire world our playground and on the other, we are sobered by its consequences. Today, it wouldn’t be surprising if an outbreak in a remote village in one part of the world spreads to a major city on the other side within a matter of days.

Of course, we cannot reverse gears or turn our back on all the benefits and opportunities of a global world. But we need to be cognisant of the associated risks. We should not be like the frog who remains comfortable in a pot of water that is being gradually heated until it boils to death — a story that is perhaps more accurate for humans than frogs.

The key is to be aware and prepared.

The problem is the solution

While interconnectedness has now become a bane in the physical world, it is a boon in the virtual one. There is a possibility of 15-20 per cent of healthcare systems shifting to virtual platforms by 2025. The telemedicine market is expected to be worth $5.5 billion in the next five years by growing at a CAGR of more than 30 per cent. This includes teleconsultations, remote monitoring, e-pharmacies and more. While Indian health-tech is at a nascent stage, the recent mushrooming of start-ups and inflow of private capital are expected to fuel the growth of this segment. Moreover, this feeds into changing consumer preferences for digital healthcare.

Home healthcare is gradually making a large portion of hospital visits redundant and that, in turn, will reduce travel costs for patients and operational expenses for hospitals. The Covid-19 crisis has sparked a surge in the home healthcare market, which had primarily been fragmented. A significant number of patients now finds it convenient to use apps and other tools to avail healthcare from the comfort of their homes. Complex tests and diagnostics are also finding their way from labs to homes as integrated health and wellness platforms reshape the framework of testing and consulting.

The research and analysis at ICICI Lombard reflect this embracing of health-tech, with Gen Z and millennials leading the way. They have gone beyond the generic habits of tracking their weight and BMI to monitoring their blood pressure, sugar and oxygen levels. With 56 per cent of the respondents to a survey saying they have a healthcare app and 44 per cent relying on a digital fitness band to track their vital statistics, there is no doubt that health-tech is the post-pandemic new normal.

Aligned incentives

As the healthcare landscape evolves, so will health insurance. The industry regulator — the Insurance Regulatory and Development Authority of India (IRDAI) — is promoting measures, such as the use of e-KYC, for easier issue and renew of policies. Today, leading insurers cover treatment through telemedicine in their policies. The benefits are three-pronged — it gives patients flexibility and ensures social distancing, reduces the load on overburdened healthcare facilities and reinforces the trust that insurance solutions will take care of health needs whenever required.

Complementing the changing face of insurance, healthcare inflation has surged due to the rising costs of medicines, tests, fees and healthcare facilities. This means insurance has clear financial benefits for both individuals and businesses. And even for the State, the more effectively the public manages healthcare risks, the more resilient is the economy. The role of health insurance is, thus, pivotal.

For insurers, the essential task is to make their products and services more accessible, affordable and convenient for customers while creating greater awareness and transparency about their benefits and limitations. The interest of insurers and their customers is aligned — to avoid unnecessary hospitalisation and minimise medical expenses. As such, insurers should focus on partnering with customers in their endeavour to stay healthy.

This bodes well for the insurance industry and society at large. As more and more customers stay healthy, the cost of claims will drop and, consequently, so will insurance premium rates. That means a larger populace can come under the insurance fold while freeing up the overburdened healthcare system—a big win for all stakeholders.

Future-ready solutions

The IRDAI has already introduced new policies aimed at wider insurance coverage. The Aarogya Sanjeevani Policy, for example, facilitates simplified insurance by introducing a standard product that is understandable and accessible to all. The launch of Corona Kavach and Corona Rakshak also came as a boon for people in the lower-income strata, giving them affordable coverage for Covid-19. More than three million policies were sold within a few months of their launch, making the world take notice of these pioneering steps by Indian health insurers.

Many new ailments are also on the radar of health insurers, mirroring the identification and rise of specific health issues. Mental illness, age-related degeneration and internal congenital diseases are also finding coverage in some new-age health insurance offerings.

India’s goal of universal health coverage (UHC) may seem audacious but is achievable with well-planned collaboration between regulators, government establishments and private players. In the first year of its implementation, Ayushman Bharat helped close to four million Indians avail cashless treatments. However, there are gaps — in infrastructure, the availability of skilled professionals, the rural-urban divide, and more. Private players can play a significant role to bridge them.

The private sector is already responsible for more than 70 per cent of healthcare services in India, and a strong partnership with the public sector can be reformative for the industry. The public sector needs to boost the healthcare financing required for a developing country like ours, bring in suitable reforms to encourage digital healthcare, and increase the supply of healthcare professionals. The private healthcare players, including insurers, can help streamline and manage last-mile delivery, drive India-centric innovation and set up healthcare standards and treatment protocols to drive efficiency and quality outcomes at affordable costs.

Technology as a game changer

India has recently started adopting the right healthcare technologies. Digital health is now within reach of several people residing in remote areas thanks to a growing young, tech-savvy populace. Technology is empowering consumers and is also an enabler for insurers looking to expand penetration and reach. We see artificial intelligence (AI), machine learning (ML) and blockchain making their way into the BFSI (banking, financial services and insurance) sector. Soon, every finance and insurance firm will need to be a fintech player, with technology becoming a necessity for survival.

We are witnessing a radical shift in the way consumers expect health insurance solutions to deliver. Features such as automated claim processing, personalised insurance plans and humanised chatbots are fast becoming the norm. At ICICI Lombard, we have been actively leveraging digital solutions to introduce innovative, tech-enabled solutions aligned with the evolving needs of our customers.

Our digital platforms like ILTakeCare app offer audio-video consultation with specialist and super-specialist doctors through “IL Hello Doctor.” The app covers all aspects of preventive, primary and secondary healthcare and enables holistic health management through various inbuilt monitoring and assessment tools. More than 15,000 customers benefited from this easy-to-use facility last financial year. We also have a digital vault for our customers to store their medical records and health trackers for their fitness goals. All these health and wellness initiatives are technology-driven and aim to make the lives of our customers easier.

Towards Preventive Healthcare

Even with a looming pandemic, it is not economically viable to shut down a country for long durations. Instead, a better alternative is to encourage citizens to maintain self-discipline and adopt healthy practices such as social distancing and wearing masks. Citizens must pledge to follow the necessary health and hygiene guidelines and protocols. Together we need to become a country of smarter, wiser and responsible citizens.

We are already witnessing a shift towards preventive healthcare owing to rising disposable incomes, health and lifestyle awareness as well as conscious wellness. The preventive healthcare ecosystem is ripe and the insurance industry is warming up to this idea. By facilitating comprehensive health check-ups clubbed with early diagnosis and intervention, many chronic diseases can be nipped in the bud.

Moreover, wellness must be looked at from multiple facets, including physical, mental, financial and emotional health. Resilience has been a critical differentiating factor in societies that emerge stronger from a crisis. ICICI Lombard’s India Wellness Index shows that people who adopt wellness are better placed to handle health-related challenges in the long run. And so, aspiring for wellness as a society will help us build a stronger, more resilient nation.

For far too long, the first reaction to uncertainty has been panic. Predicting when and where a health hazard may threaten us is still an evolving science. Until then, practising prevention, building resilience and having a sufficient financial cushion is a better risk mitigation strategy. It is time that all of us, as stakeholders in the healthcare ecosystem, come forward to build comprehensive, enabling, and future-ready solutions for our young and aspiring population.

(The author is MD and CEO at ICICI Lombard General Insurance)