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View from India - InsurTechs can keep health insurers healthy

Source: Asia Insurance Review | Sep 2020

With the increasing number of COVID-19 cases, there is a surge in those buying health insurance. For the health insurance industry to remain healthy itself, it is crucial to adopt technology – and insurtechs are ready to offer a helping hand.  
By Anoop Khanna
In India during the current pandemic insurers are losing the very vital trust of their policyholders and are facing growing dissatisfaction. The absence of any pricing and treatment protocols with healthcare providers and largely missing reinsurance cover is also putting the insurers in a financially weak position.
Asia Insurance Review spoke with health InsurTechs, an insurer and a healthcare specialist about what could have been done better to avoid such a chaotic condition.
Healthcare industry requires a regulator
Universal Sompo General Insurance appointed actuary Vikas Garg said, “A regulatory body for healthcare industry is very much required. There are many challenges of healthcare system which a regulator alone can address.”
He said, “Major challenges faced by insurers due to the non-existence of a healthcare regulator include the lack of standardisation of treatment, non-standard charges for procedures and treatments for the same disease in different hospitals in the same vicinity, lack of defined standard operating procedures, lack of standard documentation and formats, proper disease codifications and a lot more.”
Investment in technology is essential
SureClaim co-founder Anuj Jindal said, “COVID has provided tailwinds to InsurTechs that have been evangelising more customer-centric ways of running an insurance business. I believe post-pandemic, insurers will strengthen their innovation teams and actively support and invest in technology, more specifically in the field of AI and machine learning.” founder Mahavir Chopra said, “Insurtechs can gradually build a high-quality primary healthcare services platform for insurance buyers. This can, in turn, control the selection of the hospital at source, whenever required. If the insurer is able to direct the customer to hospitals, it can help nurture negotiating power with the hospitals - essential to control billing, losses, as well as overall claims experience.”
He said, “Insurers can reduce the cost of treatment by improving their negotiating power with hospitals. It is important to be able to control billing tariff, everything else is a futile exercise. The most effective way to do that is if an insurer is able to control the flow of patients to hospitals.” co-founder Abhishek Poddar said, “InsurTechs can help insurance companies predict their costs and provide premium rates lower than usual based on workforce data of companies. Data from wearable technology can give insurers information about the lifestyle of employees which they can use to determine rates, mitigate risk and even prevent losses.”
Mr Poddar said, “Unlike all other industries where the cost of product and/or service have a maximum retail price, healthcare and treatment costs do not have any fixed price. Treatment can cost you $133 at one hospital and $6,700 in another.”? 
“Telemedicine, e-pharmacies and diagnostics at home have significantly brought down costs of out-patient healthcare services. InsurTechs can bridge the digital divide between insurers and 
health-tech companies by building a layer of cashless processing of these expenses of policyholders,” said Mr Jindal.
Mr Garg said, “InsurTechs can help solve problems like developing algorithms to assist the prospective policyholders buy adequate coverage and appropriate product in the most customisable way, comparing various health products in an easy to understand format, helping insurers to reach masses in a cost-effective way. InsurTechs can help fasten the claim adjudication process and reduce claim turnaround times.”
Improving cost efficiency 
Mr Chopra said, “InsurTechs should work with health-techs to provide front-end primary healthcare offerings and experience to customers. Once you have information and/or own the experience around primary healthcare services, you can build systems to ensure that you provide the right and timely recommendations to the customer.”
“InsurTechs can help analyse millions of data points of the claims seen by insurance companies, and quickly estimate cost of treatments at a given hospital based on past data. This can then help consumers choose a hospital that meets the service standard that they expect,” said Mr Poddar.?
InCHES X-CLAIM CEO Dr C H Asrani said, “Consumers, when deciding which hospital to choose, have no idea about the expected cost of treatment and no way to compare the cost of treatments across hospitals that may offer similar service.?This leads to inefficiencies. 
“In the initial stages of the pandemic, entire treatment was being provided by government hospitals and elective admissions to hospitals had stopped hence claim numbers initially dropped, and most insurers were able to manage.”
“Current pricing does not include pandemic exposure and associated steep costs. The insurance industry will require statistical models to create benchmarks based on current COVID-19 claim experience,” said Dr Asrani.
Managing claims is important 
Dr Asrani said, “COVID-19 claims are a major challenge for the health insurance industry. Abuse and fraud in health and accident insurance is going to rise. We already have 10%-15% of claims being fraudulent and even a 5%-7% rise will hit the industry badly.” 
With most policies currently being sourced digitally, plenty of non-disclosures are likely to creep in as people need a policy at all costs.
Mr Jindal said, “We are unlocking aggregated claims data to generate insights on efficiency of an insurance product in paying for health claims in future. With objective analysis of claim payout efficiency of each insurance product, our platform will make insurance policy selection a data-driven experience.”
He said, “InsurTechs can help in rapid digitisation of claim documents using AI and machine learning tools and claim data processing, customer communications and payment settlement can be automated. The process of claims audit can also be scaled up.”
Mr Jindal said, “I feel insurers have been exposed due to their poor investments in claim technologies on this front. Almost half of claim disbursements are through reimbursement claims. Patients are still required to send hard copies for claims, they are still required to print claim forms and sign physical declarations. Today platforms exist that rapidly digitise the entire process with minimal investment and time.”
Integration with other stakeholders
Insurers can integrate with multiple stakeholders in healthcare value to help them with relevant, authentic data to select risk. It will also help insurers improve the customer experience by improving the enrolment process and providing better claim tracking. 
Mr Poddar said the current pandemic has structurally changed how insurance companies look at InsurTechs. Insurance companies now realise the urgency of innovation and moving to digital distribution and claims management. 
COVID has boosted interest in health insurance
In direct to consumer retail covers,, Coverfox, and other aggregators have seen record growth in traffic, conversions, and premium. 
In agency-based sales, insurers with robust technology platforms for their agents coupled with rigorous training and support have been able to do reasonably well, compared to others. 
In group insurance, micro, small and medium enterprises that were contemplating health insurance cover went ahead and bought it for their employee’s wellbeing. The voluntary covers with regards to COVID19 - like the Group Corona Kavach too have seen encouraging uptake. 
Mr Chopra said, “Technology has become important during the pandemic - even for traditional insurance companies. Many health InsurTechs have seen increased interest in health insurance products during COVID 19. Health Insurtechs should focus on reducing complexities in policy coverage, bringing in transparency in coverages and exclusions.” A 

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