The health of clients has been a longstanding issue in the insurance industry. Having a healthy client base is not only good for the clients, for the insurer, it’s good for business, as healthy clients are likely to make fewer claims.
As Steve Piper, Head of Underwritten Intermediary Sales at Hollard Life Solutions notes, “One of the biggest challenges with severely impaired lives lies in finding mutually acceptable terms that are acceptable to the insured party’s preferences while maintaining the insurer’s comfort level of exposure to risk. In many cases, the looming and substantial risk of claims becomes so pronounced that the pricing necessary to cover such claims and related costs becomes financially burdensome.”
Many insurers have recognised the opportunity to play a role in helping their clients maintain healthy habits that will, in turn, help them maintain their overall health. However, Poovan Perumal, Head of Product, Pricing, and Sales Enablement at Hollard Life Solutions, notes that one of the biggest challenges is that many providers aim to attract healthy clients, with incentives in place to only benefit individuals who stay fit and keep super healthy through rewards, premium discounts, and loyalty schemes. Meanwhile, the reality is that not everyone can keep up – people are not superhuman.
A more inclusive strategy
So, what’s the alternative? For starters, insurers need to recognise that we are dealing with unique individuals with real-life issues, and we need to help people to better manage health-related risks and help them enhance their overall quality of life in a way they are most comfortable with.
It’s with this thinking in mind that Hollard Life Solutions has introduced Health Guru, a wellness coaching platform that provides its clients real-time access to personal health coaches to guide and support them in making changes that will make their health goals a reality. The platform also offers a wide range of informational reading material and videos that are suitably recommended based on the client’s initial health vision of choice.
“Many South Africans are living with co-morbidities and underwriting them for insurance can be complex,” says Perumal. “It also requires levels of technical expertise to price them appropriately. While there is a lot of information available to help customers manage their health risks on their own, we want to provide them with convenient tools and support to enable them to achieve their health vision.”
Examples of such lives might include clients with diabetes or high BMI scores – through platforms like Health Guru, insurers can provide such clients with wellness coaching to manage their conditions along the way. Perumal believes that providing such support to higher-risk lives could help them lead a better quality of life and result in reduced risks of mortality and/or morbidity.
Personalisation is key
The key in providing wellness coaching is to be forward-looking and acknowledge that each person’s health and wellness journey is unique, and their needs and aspirations should be addressed individually. “A central part of wellness coaching is customer empowerment,” Perumal says.
“In this process, policyholders, working with coaches, have someone to hold their hand on their wellness journey. There is no pressure for incentives – instead, this is a journey that recognises the individual’s holistic circumstances, to help the customer navigate their health and wellness journey. We are embracing a customer-centric approach in wellness coaching, where the customer informs the journey and we are here to equip and guide the customer to reach the goals they have set for themselves,” says Perumal.
Rules for real life
In addition to lowering risk by helping clients stay healthy, underwriting also plays a role in making sure that risk is fairly distributed and low-risk policyholders aren’t having to cross-subsidise more high-risk policyholders to an extent that it becomes unfair.
“Insurers strive to strike a balance by managing the extent of risk cross-subsidies in the overall book,” says Piper. “When it comes to underwriting these conditions for insurance purposes, the process can be intricate and demands a substantial level of technical proficiency to accurately determine appropriate pricing. Despite the abundant wealth of information accessible to help individuals in managing their health risk factors, the complexity of co-morbidities necessitates specialised expertise in the insurance sector.”
This is where technology can help. “We are leveraging automated underwriting tools that harness the power of machine learning to refine and constantly update our rules in line with real-life circumstances,” says Piper. “In addition, we have also taken a decision to offer a deferred life underwriting option, to ensure that individuals can secure some form of coverage, even in cases where the market may have reservations about their insurability. As we continue to navigate the digital age, without a doubt, product design will need to be more flexible, recognising the evolving nature of real-life circumstances.”
While the insurance industry needs to keep business top of mind, it is also important to remember that we are in the business of people’s lives and we should always operate with a degree of compassion. By striking a balance to address some of these challenges, we can ensure that as many people as possible, who would not traditionally qualify for coverage, are covered equally.