Could hyper-personalisation be the key to the challenges in the health and life insurance industry?


Insurers in the life and health insurance industry have a huge opportunity ahead of them to meet new consumer demands, increase sales, and drive brand loyalty.

Recently, Swiss InsurTech dacadoo ran a webinar in conjunction with Capgemini. The speakers included Peter Ohnemus, president and CEO of dacadoo, Samantha Chow, global life annuity and health sector leader at Capgemini Financial Services and Bernardo Ferreira Castello, director at Bradesco Vida e Previdencia S/A.

The panel discussed the key challenges the life and health insurance industry faces, and the opportunities that a hyper-personalisation approach represent in light of those challenges.

According to Ohnemus, the insurance industry is seeing two major trends play out, which has put the world on the “wrong track”, and the hyper-personalisation strategy can correct this.

The first is that health insurance premiums are rising. In the US alone, Ohnemus said they are planning a 6.5% increase in 2023, with similar increases to take place across Europe. Fuelling this upward pressure is an aging population and growing obesity rates and chronic diseases. In fact, 70-80% of healthcare spending is on chronic diseases.

“The big challenge for the health and life insurance industry is to roll out hyper personalisation in order to tackle today’s challenges,” Ohnemus said.

The second trend is the industrialisation of “cheap calories”, which is in turn contributing to rising obesity rates, diabetes, and other health conditions. Ohnemus said back in 1960, households were spending around 20% of their income on food, this fell to around 6.4% today.

Although the world is currently on the “wrong track” Ohnemus said there is reason to be positive, because hyper-personalisation and digital health represent a very large growth opportunity.

Ohnemus pointed to a 2021 study by McKinsey that reported that monitoring and treating illnesses was a $150bn industry, and improving wellness was a $130bn industry, representing a $280bn sector. Moreover, the study projected the industry to grow to around $0.5trn to $1.7trn by 2030.

Why should companies pursue a hyper-personalisation strategy?

The approach’s benefits can be split into four key categories. The first is more customer engagement. Ohnemus said dacadoo sees up to 150% growth in active communication between the insurance operator and the customer.

Secondly, digital health engagement platforms (DHEPs) are a significant motivator for new customers when selecting a new health insurance policy, thus they will drive more sales.

Finally, Ohnemus said the impact on an improved brand image should not be underestimated. Consumers appreciate operators who appear to care about them. This has only become more important in the aftermath of the Covid-19 pandemic.

Value-based care

There is a monumental shift taking place towards value or outcome-based care (also known as VBC), and Ohnemus said this is only going to grow. He added that you can only provide a VBC system if you have hyper-personalisation. “There is no value-based care if there is no integrated system.”

This is where personalised IoT health score platforms come in. More tools are becoming available, monitoring indicators such as heart rate, body weight, blood pressure, sleep analysis and other health insights. All these products are shipping commercially today.

Ohnemus pointed to research from Reuters Insurance that reported that 54% of all insurance products are now using AI and analytics as part of their hyper-personalisation strategy.

According to dacadoo, hyper personalisation can be broken down in five different layers: generic, macro, micro, personal and hyper personal (this is where IoT comes in).

Physical wellness and financial wellness

Capgemini’s Chow went on to explain Capgemini’s view of hyper personalisation, in which it views wellness as a service.

Chow pointed to date from Capgemini’s 2022 World Life and Health Insurance Report. She said true wellness programmes are the key to hyper-personalisation. “This includes both physical and financial wellness, as they are truly interconnected.”

Physical and financial wellness have elements in common: building, preventing and improving. In the aforementioned report, 70% of customers said good financial health positively impacts their physical health. Yet, 75% of adults that are employed are in good health, whereas only 23% are in poor health. “This clearly represents how health problems clearly impact individual financial situations,” Chow said.

The question, however, is who is in a position to promote this holistic view of wellness, Chow said. Insurers are best positioned to leverage this opportunity, but they need to improve their offerings and enhance their relationship with customers.

Consumer demands

Bradesco Vida e Previdencia’s Castello followed on from this to outline Bradesco Vida e Previdencia’s view on hyper-personalisation. The company is the leading life insurer in Brazil.

He pointed to five major trends set to take place in the insurance industry over the next five years, all of which point to shifting consumer behaviour, desires, and insurance needs.

According to a 2021 Gartner CX Study, Castello said 63% of consumers said it was important that their provider provides them with personalised services. In addition, 69% of consumers said they would share relevant data in exchange for lower insurance prices. “Policyholders want personalisation,” he added.

Castello concluded by saying that the data that consumers are willing to share will also help insurers better underwrite and price their policies, provide a better service and make more accurate recommendations, and what’s more, they are anticipating having to do this for better and more personalised services.

You can view dacadoo’s Ohnemus discuss hyper personalisation in the life and health insurance industry here.

Earlier this year, dacadoo unveiled its upcoming version 5.0 of its Digital Health Engagement Platform (DHEP)to revolutionise digital health engagement.

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