Insurtech: A growing marriage with healthtech & telemedicine

InsurTech Digital analyses the growing relationship between insurtech and healthtech, and how innovation in health insurance will boom in the near future

In its latest report, The Brainy Insights suggests the global insurtech market is set to reach US$82.3bn by 2032, growing at a staggering compound annual growth rate (CAGR) of 28.9%. But what is driving this rapid insurtech growth? The healthcare and insurance sectors. 

In 2022, healthcare specialist insurtechs dominated revenue, generating US$2.27bn for the year. This contributed almost three-fifths to all global insurance third-party administrator market revenue.

As such, the sector’s significance to the growth of the insurtech market is supreme. But what is spurring such growth in the healthcare insurtech sector, and how has the marriage between insurtech and healthtech come about? 

Insurtech and healthtech: Playing hand in hand

For Healthcare and Clinical Developer at digital mental healthcare provider Wysa, Chaitali Sinha, the two don’t necessarily need to be seen as separate entities. 

She says: “Tech can often be the bridge between the world of payers and providers. It can optimise workflows, share meaningful data points, and reduce the roadblocks that can add friction to this relationship.”

Perhaps then, it is the compatibility of the data gathered by healthtechs and leveraged by insurtechs that is driving optimal partnerships in the space. Head of Solutions, Europe for Persistent Systems, Devashish Mishra, seems to think so. 

He says: “Healthtech companies have heaps of valuable data that insurtechs can use to curate products. With the rapid growth of telemedicine, this pool of data is expanding exponentially.

“By crunching data provided by healthtech companies, insurtechs can launch offerings for specific medical cases, and be sure they have the right premium and cover in place. 

“Not only does this create new revenue streams, but it also provides a far more personalised experience for customers — which is key to succeed in today’s insurance landscape.

“For healthtech companies, the demand for data from insurtechs provides significant revenue. There are also opportunities for strategic partnerships. We’ll see more healthtech and insurtech companies coming together to provide a full-service offering.”

Such full-service offerings are, of course, dependent on partnerships between insurtechs and healthtechs, an industry-wide marriage that Vijay Adapala, EVP of Global Supply Partnerships at Doceree, feels is still in its infancy.

“Insurance companies are only just beginning to recognise the advantages of using smart insurtech, which has the potential to accelerate market growth, as these technologies become more sophisticated, accessible, and integrated into daily life,” notes Adapala.

What’s more, as these technologies become more advanced, what Capgemini’s Global Industry Leader for Insurance & Financial Services, Adam Denninger, calls the ‘overlap’ of insurtech and healthtech will only broaden. 

The payer side of health, particularly in the US and other nations with standardised private healthcare, is insurance. So, as put by Denninger, “the two big overlaps are in sales (including quoting, rating, underwriting, broker management, etc.), and service (billing, mid-term changes, etc.). 

“Because the main business processes have a lot of overlap, InsurTech and HealthTech solutions often have significant technology overlap (both in functionality and in architecture).  This allows cross-innovation and even competition between the two tech worlds.”

Insurtech and healthtech: Driving customer-centricity

Just as the core tenant of insurtech is to drive customer-centricity, so is it the same goal for partnered health and insurtechs. 

In fact, insurtech health providers have been heralded for going further, expanding ‘medical inclusion’, not just the quality of customer service. Although a widely used term, you may be wondering what medical inclusion actually means.

Capgemini’s Denninger has the explainer: “Medical Inclusion can mean two related but different things.  

“A general meaning is around making care available to communities that are underserved or not given reasonable access to high-quality care; a more technical meaning is about coverage eligibility rules insurance companies use to control the extent of availability of certain coverages in certain products. Technology firms in general are enabling both of these to occur. New technology-enabled tools improving access to care, quality of care, and innovative care are pervasive. 

“Similarly, new tools enabling superior use of data and analytics to perform underwriting, pricing and claims management (which are all critical to the financial stability of the insurance industry) are also pervasive. These changes are heavily driven from the healthtech and parts of the insurtech world.”

Yet despite the capabilities being opened in health insurance by technology, Wysa’s Sinha feels there is space for the industry to become more customer-centric, chiefly because the healthtech being employed, and subsequent partnerships struck are in their early stages industry-wide. 

Some significant partnerships have already been established, however, namely partnerships between Aetna and Apple, along with Oscar Health and Cigna. These partnerships have helped drive early innovations in telehealth specifically. 

Just look at Aetna’s Attain product. Designed specifically for Apple, the app takes your unique health history and combines it with wearable device activity – maximised by offering personalised goals and motivational awards. 

Such partnerships are fuelling the telemedicine industry, but as Sinha previously noted, these partnerships are still in their early stages. With this in mind, what is holding the industry back? 

“Regulations and pre-existing systems can both play a role in how fast this innovation will spread across geographies,” notes Sinha.

It would seem then, that regulations may be slowing down growth in the sector. 

The Brainy Insights backs this up, citing stricter regulations on the insurtech industry as the primary caveat that could affect its estimation of an US$82.3bn insurtech market by 2032.

Principally, regulations could impact insurers’ access to client data, given greater calls for data privacy in an era of increased hacks and cyber security concerns. 

Sinha does not think regulations will stop the industry’s growth, though, it just may take time for the already dominant insurtech market to spread its wings further. 

Wysa itself is already in the process of striking an insurance partnership with SwissRe, helping to provide it with “a more personalised assessment of risk to insurers” while becoming its “health and well-being tracking mechanism across physical and mental health metrics”.

Insurtech and healthtech: A telemedicine future? 

With the early partnership successes of insurance and healthcare in mind, delivering mass-consumed telehealth products to the market points firmly to a digital-first healthcare future. 

But how quickly will this future become a reality, and will consumers feel comfortable without seeing a doctor face-to-face? 

As put by Persistent Systems’ Mishra: “Telehealth can never fully replace doctor-patient interaction. There will always be people who feel more comfortable sharing information and receiving treatment in person — digital records are around forever, and there’s a genuine fear of private interactions being leaked.

“In most cases, telemedicine can easily replace face-to-face interaction — particularly for routine treatments. The way we are heading, physical interaction will only be reserved for the most serious and private treatments.”

It seems, then, that digital interactions may be something consumers need to accept whether they like it or not. 

For Doceree’s Adapala though, patients would prefer a blend of digital and in-person interactions, depending on the circumstances. He says: “COVID-19 caused the telemedicine model to gain a sizable market share in 2020–21 internationally, altering how patients were cared for. 

“However, when circumstances stabilised, face-to-face consultations also started to gradually reappear. 

“Today, we recognise the strength and comfort of technology as well as the value of being ready for any tragedy that may arise in the future, now that the world is in a much better position and has recovered from the pandemic.

“Going forward, I regard telehealth as a vital component of the broader healthcare ecosystem that complements in-person consultations.”

Capgemini’s Denninger agrees, believing health insurance has been on a path to automation for many years. 

He concludes: “Over the last ten years the industry created roles dedicated to excellent customer experience. Chief Digital Offers, Heads of Digital, Global Heads of Customer Experience and many other similar roles exist with a common purpose: winning business (and keeping it) with great experiences.  

“These executives fully understand that high-quality automation is critical, both to meet customer expectations and to reduce operational costs for their companies. 

“They also fully understand that there is no finish line in this race; expectations are constantly changing, and what carriers do must change to meet their customers’ needs. 

“This drives a constant need for insurtech and healthtech innovation; a constant need for new solutions to new (and old) problems.”

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