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Peter Ohnemus

Peter Ohnemus

CEO & Founder of dacadoo

Insurance Trends For 2021 And Beyond

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As the challenging 2020 has come to a close, a new wave of hope and opportunities is now on the horizon during the current year.

The Covid-19 vaccines bring a surge of relief for our planet’s population, healthcare systems and our economy, along with a tangible promise of a better future. But it also leads us to wonder: how will Life and Health insurers adapt to the changes Covid-19 has brought? Will insurers thrive during this year and beyond? And, if so, which will be the key determinants of that success?

We explore the major trends envisioned for the Life and Health insurance industry and how our team of experts see the not-so-distant future panning out.

A Strong Focus On Wellness: The Aftermath Of The Pandemic

After the world’s foundations were shaken by Covid-19, insurers realized the power of prevention when it comes to their members health in general. It has also pushed health and wellbeing to the forefront of consumers’ concerns.

So, insurers have responded by boosting their traditional medical and life cover with an array of digital health or wellness products and services.

It is estimated that insurers that quickly establish a strong presence across the digital health ecosystem will gain a big advantage over competitors.

Needless to say, implementing digital health services not only boosts consumer engagement (something that insurers still need help with), but it also allows your users to lead healthier lifestyles. As they take accountability of their overall health, Digital Health Engagement Platforms (DHEPs) can help fight lifestyle-derived diseases, such as Non-Communicable Diseases (NCDs) which are the leading causes of death and disability worldwide. Read more about how DHEPs help prevent poor lifestyle behaviors.

Additionally, new types of coverage may become popular due to the pandemic, such as the emerging parametric policies (which pay upon the occurrence of a triggering event rather than having to claim a specific insured loss). This could mean that future pandemics or virus-led outbreaks may be easily insured.

Shifting Resources to Prioritize Digitization

As seen in Deloitte’s recent report, insurance organizations around the globe are taking their expense management attempts more seriously than ever before in their effort to rearrange the resources towards an accelerated digitization.

Rather than looking at just cutting costs, insurers are shifting their priorities and delaying non-essential tasks in order to recover from the Covid-19 pandemic and thrive through their digitization metamorphosis.

Insurers are focusing on different priorities, which are shown below, divided by region. In regards to product development, North America and Europe are shifting the focus towards the forementioned parametric policies, as they would be able to cover financial losses triggered by a certain event. The  APAC region is looking at usage-based insurance via real-time monitoring. This is very interesting as we at dacadoo talked extensively about how personalized insurance products such as Pay-As-You-Live (PAYL) plans would become increasingly popular among insurance customers.

When it comes to underwriting, insurers seem to agree that their efforts need to be improved. The ultimate goal is to better leverage artificial intelligence (AI), alternative data sources, and more advanced predictive models to augment an underwriter’s capabilities. Interestingly, this is a concept which we’ve strongly believed in and the reason why we launched our Risk Engine, which helps underwriters estimate morbidity and mortality risks in real-time with the help of AI.

System Reboot: My Digital Twin

In addition to offering health and wellbeing services as part of their value-added insurance offering, insurers should be aware of the incoming wave of extended reality (XR) and digital twins (which enable the creation of exact digital replicas of any object or person in the physical world). Extended reality is an emerging umbrella term for all the immersive technologies. It encompasses the ones we already have today –augmented reality (AR), virtual reality (VR), and mixed reality (MR)– plus those that are still to be created.

One of the most exciting types of augmented reality for the insurance industry is the upcoming rise of digital twins in healthcare. At dacadoo, we believe the technology –previously used for engineering and IoT optimization–  will allow users to create digital replicas of themselves for health and wellbeing purposes.

Through these digital twins one will be able to apply models and simulations of future health outcomes depending on lifestyle behaviors.

We believe it’s only natural that established Digital Health Engagement Platforms, such as our Wheel of LifeTM, will innately derive in the expansion of that lifestyle navigation from within the smartphone screens and into the 3D world. Through our digital twins, we’ll be able to envision exactly how our health and our bodies will look like in the future depending on lifestyle factors. We’ll be obtaining the best from both worlds (analogue and digital) and producing a tangible replica of ourselves that can be analyzed both for broad underwriting modeling and for particular-case handling, as a potential healthcare practitioner would be able to just access the digital twin, reducing the need for physical consultations.

In-person appointments and meetings are something that has been vastly unpopularized due to Covid-19, and we believe this trend is here to stay. Being able to take advantage of a broad range of products and services from the comfort of your own home (or whatever desired location) is not only convenient for the consumer but also efficient and cost-effective for the insurer, so we believe that we will continue to favor virtual appointments and our digital replicas doing the inconvenient tasks for us.

We hope you found this article insightful and that it sparked some interesting ideas. We’d love to continue the conversation about insurance trends for 2021 and beyond, so do feel free to reach out if you’d like to discuss further or if you have any questions about our product offering.

Wishing our readers all the best for the current year 2021,

The dacadoo team

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