The need for personalized healthcare in a post pandemic world
Since the introduction of Health Insurance in India in 1985, there have been thousands (literally, thousands) of health insurance products introduced. Despite being in existence for almost 4 decades, majority of the products are flawed and not suitable for those it is sold to.
The primary reason for this is: In India it is still a push product (sold by agents mainly). Why this happens is extremely simple economics. Agents of most companies are highly incentivized by the companies on the aggregate amount of products sold. For example, the commission on ULIPs (Unit Linked Insurance Plan) for most companies is somewhere in the double digits – let that sink in, over 10% commission for selling Insurance. In comparison, Real Estate commission is around 2% all across India; annual fees for MFs and PMs’ as well are around 2% roughly in India.
Some more harsh truth, there are seldom several hidden riders in health insurance products that the clients are not aware of. Also, several beneficial features like pre and post hospitalization are often not explained since those are not features the company wants to sell.
Since we have some understanding of the state of the Health Insurance Industry in India, it is important to understand what the client must opt for; One should always buy personalized health insurance to suit one’s own needs. Personalized insurance is the process of reaching customers with targeted pricing and offers. This is important for several reasons:
Personalized insurance quote
Customers expect personalized treatment
Driving more effective sales and increasing revenue
According to altexsoft, Oscar, a health insurer that provides its clients with a concierge team of medical professionals who give medical advice and educate on the right specialization of doctors for their specific health condition. They also set aside a separate concierge team in cases of emergencies that helps with the patient’s discharge and follow-up care.
Oscar simply put is a logistics app – an intermediary (replacing physical Insurance agents) between the user and the health system. The platform facilitates the customer’s interaction with their healthcare professionals. Consultations also happen over the application. Oscar has also improved its high-touch services, including telemedicine and an “Ask your concierge” feature that connects users with a health insurance advice team.
A lot of other Insurance providers across sectors globally are employing personalized services to garner a larger share of the pie but more importantly, to reduce costs for the clients. Ex: Players like Trov in the US offer the clients an option to discontinue parts of the plan they might not need to save costs which is not the case with traditional insurance products.
Many players globally are also using Big Data and AI tools to improve services. Cover, a US based Insurance provider, collects data from clients on the basis of a questionnaire to decide which product would best suit the client. It also tracks prices across a variety of products to alert the client in case of a price drop for an ongoing product. This method of advice based on action results in offering the right product on the basis of preference of buyers.
We now know what is the need as well as benefit and types of personalization; This transformation of Insurance offering from physical (traditional fixed product offering) to personalized health cover is disrupting the Insurance Industry. This also creates a natural advantage for the Insurance companies, as in their major target audience – 20-45 year age group. This age group has the best probability of looking at health insurance products out of Interest rather than purchasing it due to a sales push.
In a globalized economy without borders, where artificial intelligence and big data constantly assess and re-assess risk, traditional insurance policies will soon become obsolete in India where digital penetration is constantly growing. To satisfy the urges of clients, providers may need to adapt to this changing environment or risk becoming dinosaurs. According to altexsoft, Insurance will become a breathing and living thing that shrinks and scales with time to accommodate the changing risks in the clients’ daily lives.