HEALTH INSURANCE
Taking the pulse of health insurance Trevor Davis, MD, Life and Health, at insurance SaaS provider Instanda, believes the landscape for health cover will look very different, post-pandemic – and platforms will help insurers looking to move fast to adapt to it The ongoing COVID-19 pandemic has created an almost unbearable tension between the need to ensure the physical safety of millions of people, and the impact on our individual livelihoods arising from lockdowns. On a macro level, this unique set of circumstances throws into question the viability of some of the hardest-hit sectors of the UK economy – and the consequential impact on jobs and, by extension, health protection, when the coronavirus storm has passed. That’s because only 13 per cent of adults in the UK have private healthcare and 75 per cent of these enjoy medical insurance as a perk of the job: they are enrolled in a company-paid scheme. But what happens when there is a severe predicted downturn in employment as a result of the pandemic? A recent speech by the Governor of the Bank of England, Andrew Bailey, suggests that unemployment rose to 6.5 per cent in the UK, equating to around 2.2 million people, during 2020 with government statistics confirming that there was a record number of redundancies between August and November. The Institute for Employment Studies forecasts that employers in Britain are planning more than twice as many redundancies than they did at the height of the last recession. Fewer people in full-time work and reduced income likely means fewer health policies and less coverage – all in an
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environment when the NHS is at capacity, general surgery is being delayed and therefore a private healthcare option would be welcomed by all concerned. It begs the questions: are major health insurers equipped to deal with this rapidly altering landscape? Are they agile enough to cope with a changing demand, in terms of numbers and accessibility? Trevor Davis, MD, life and health, at Instanda, a platform provider for insurance carriers, distributors and re-insurers, says the answer to that is ‘no’. Or, at least, not yet. “As reduced income for many people becomes a problem, they may lose access to private healthcare. This potentially impacts carriers as companies/SMEs may cancel their cover,” he says. “The challenge is to offer health insurance more flexibly in the midst of a century-defining health crisis. Particularly as existing health insurance is not as cheap and flexible as it should be.”
Technology as catalyst It is in this space that Instanda is operating, providing a platform that increases flexibility and reduces costs. Health insurers are traditionally big beasts, slow to innovate and still, all too often, chanting a one-size-fits-all mantra. But many are now taking on the challenge, engaging the services of Instanda and others to make themselves more relevant in this evolving new business environment.
“Legacy systems are holding back insurance productivity but we are seeing more and more insurers taking on flexible solutions,” says Davis. “No-code software providers, such as ourselves, create the opportunity to innovate at scale and rapidly change the way the insurance value chain delivers products to customers. Business teams no longer have to lean on skilled IT developers to help build a product. They simply ‘drag and drop’ the components they need from a library in our no-code platform. “And it’s an alignment of what customers actually need, as opposed to what insurers want to provide. Somebody under 28 needs simple insurance for travel protection and targeted health cover. Whereas somebody over 55, wants to protect themselves from becoming seriously ill and manage the cost of this insurance cover. These are very different motivators for buying insurance. “The issue for insurers is how they provide the right solution, in the right way, at the right time, to everyone, whether they’re direct customers or through employers’ schemes. And certainly, employees have found health insurance provided by employers to have limited flexibility to meet their own or their family’s needs. In an age of open banking, customer segmentation and artificial intelligence capability, we can no longer expect consumers to accept such broad brush policies.” An opportunity to reform the design www.fintechf.com