The life and health insurance industry has been going through several noteworthy changes over the past decade. From fintech providers and new technology applications to increasing interest in voluntary benefits, the industry has been evolving. Some new trends are also taking hold which should interest both insurance professionals and consumers.
Increasing Critical Illness Coverage
Both the higher rates of critical and chronic illnesses such as cancer, diabetes, chronic obstructive pulmonary disease (COPD), dementia, and rheumatoid arthritis among Americans and the learning lesson provided by the pandemic are driving broader critical illness coverage. Also driving this expanded coverage are medical advancements which are providing greater insights into various diseases and medical conditions which, in turn, is enabling insurers to better form their coverage terms. One example of advancements facilitating increasing critical illness coverage are dementia benefits with riders that expand in-home care facility admission and caregiver support. Also related to serious cognitive disorders are benefits that provide coverage for the prevention and early detection of these disorders while enabling seniors to age in place at home versus a costly nursing home. These “functional impairment benefits” are a hybrid of both critical illness and disability insurance coverage.
Merging Group and Individual Coverage
As workforces become more diverse in terms of full-time, part-time, and independent contractors/gig workers, there has been a trend toward the converging of group and individual insurance coverage. This has been occurring in two ways. In one form, insurance companies are selling policies through the workplace. In another form, insurers are establishing specific criteria through which they create a group of individuals and provide products such as voluntary benefits that include features appealing to the individuals in the group, as well as group underwriting.
In the first form, an insurer might offer an employer focused on employee health and fitness using rewards for meeting wellness goals using a proprietary game-like interface that uses digital currency and provides employees with various health services (e.g., mental health support, telehealth physician access, fitness programs, etc.). This format also enables employers to enhance their group benefits by adding more products that individuals indicate they want. In the second form, a broker might provide a continuation of coverage to independent contractors and gig workers in the event they become ill, disabled, and/or die. Through this form, a disparate group of individuals would be created, and the platform would provide employee benefits that these workers would be receiving if they held permanent positions in a company.
The Formation of New Partnerships
Another new life and health insurance trend that is happening now is the formation of partnerships between traditional and non-insurers, often clinical technology companies. Together, they are developing innovative solutions and tapping into new markets, in addition to enhancing their current policyholder relationships. These partnerships are working in numerous ways. For example, a healthcare solution provider leverages Artificial Intelligence (AI) and Machine Learning technologies with imaging technology to detect skin lesions that could become cancerous. With this information, health outcomes can be improved while insurers are better able assess risks and reduce health insurance claims. In other examples, a data collection company uses Machine Learning to capture clinical metrics (i.e., heart rate, blood pressure, etc.) which can then be shared with an insurance partner. These are just two examples of how these partnerships are developing.
For the life and health insurance industry, innovative solutions that ultimately support insurers’ goal to provide financial protection for consumers, and also help improve their operations are valuable for all stakeholders.