General

Change is no longer an exception for insurance companies—it’s the rule. With new competitors emerging and technology advancing at breakneck speed, staying ahead isn’t just an advantage; it’s a necessity. But while innovation is critical, insurers often face a familiar hurdle: regulatory compliance. The constant need to meet ever-evolving regulations can slow progress and make it difficult to focus on growth.

Fortunately, this is beginning to shift.

Insurers are now turning to technology, specifically RegTech—Regulatory Technology—to manage compliance in a more streamlined and cost-effective way. By automating tasks and utilizing tools like virtual agents and Robotic Process Automation (RPA), RegTech not only ensures regulatory demands are met but also enhances customer experiences and optimizes operations. It’s becoming the key to balancing compliance with innovation.

To better understand the impact this technology has had on the insurance sector, let’s explore the ABCs: What exactly is RegTech? Why do insurers need it, and what are some notable examples we’re seeing today?

What is RegTech?

RegTech refers to the use of advanced technology to help firms, big and small, comply with regulatory requirements. From finance and healthcare to education and hospitality, numerous industries benefit from technology that helps keep regulations in check.

Legal and compliance departments are often under pressure to stay updated and ensure every aspect of the business follows the rules. In the insurance industry, RegTech automates compliance processes across various business functions like reporting, monitoring, and data auditing. Compliance isn’t optional—insurers must adhere to guidelines set by regulators, but this can be overwhelming, especially when regulations change frequently.

Keeping up with regulations

The insurance industry is particularly vulnerable to regulatory changes, with rules often varying significantly across regions.

Last year, Aviva faced a hefty fine of $600,000 for failing to comply with auto insurance regulations which required insurers to provide auto insurance quotes to all eligible consumers under the company’s approved underwriting guidelines.

Manually keeping up with these evolving requirements is not only labor-intensive and time-consuming but also prone to human error. By integrating RegTech solutions into insurance systems, companies can automate critical tasks like reporting, monitoring, and compliance checks, significantly reducing the risk of non-compliance.

Beyond regulations

While RegTech’s primary focus is on compliance, its benefits extend beyond regulatory needs.

Automating processes like KYC (Know Your Customer) ensures faster onboarding, fewer errors, and quicker claims settlements, all of which improve the overall customer experience—something every business strives for.

Additionally, RegTech simplifies regulatory reporting, a typically time-consuming and error-prone task.

Start-ups like Duck Creek and Next Insurance help businesses, particularly small businesses in case of the latter, to ensure compliance by automating and integrating business processes under one digital platform that automates data collection, submission and generation of reports, among other benefits.

Overcoming legacy system challenges

One common hurdle insurers face is the reliance on outdated legacy systems, which can make adopting new technologies difficult. Fortunately, many RegTech solutions are designed to integrate seamlessly with existing infrastructure through APIs and cloud platforms.

This enables insurers to modernize their operations without needing to completely overhaul their systems, allowing them to benefit from new technologies without disruption.

Big Data vs. Smart Data

Insurers collect vast amounts of data daily, but not all of it is equally useful. While Big Data refers to large, unprocessed datasets, Smart Data is refined information that provides actionable insights.

RegTech plays a key role in transforming Big Data into Smart Data, allowing insurers to make more informed decisions about compliance, risk management and customer behavior. This refined data can improve everything from policy pricing to underwriting, ultimately helping insurers better serve their customers while maintaining regulatory compliance.

Aside from that, RegTech solutions like Zest AI excel at using advanced analytics and artificial intelligence (AI) to monitor risks and identify potential compliance issues in real time. Machine learning (ML) allows these systems to predict potential breaches and flag them before they become costly problems.

With cognitive computing, Regulatory Technology can analyze complex patterns and predict risks, improving fraud detection and optimizing underwriting. PwC’s 2022 survey found that 46% of insurance firms had been exposed to fraud or financial crime in the previous 24 months.

ML, in particular, speeds up risk assessments, making decisions faster, more accurate, and more reliable. This means insurers can take proactive steps to mitigate risks while improving operational efficiency.

The future?!

RegTech might come with some upfront costs, but in the long run, the benefits easily make it worth the investment.

Automating compliance processes not only reduces operational expenses but also cuts down on regulatory fines and penalties. In an industry where even the smallest fines can amount to thousands of dollars, this is a game-changer. Aside from that, it eliminates human error, making compliance more efficient and less risky.

RegTech is clearly not just a passing trend—it’s becoming the cornerstone of the insurance industry’s future.

We’ve all heard the buzz about 5G—how it’s going to make everything faster, smarter, and more connected. But what does that mean for the insurance industry?

As 5G rolls out across the globe, it brings faster speeds, lower latency, and the ability to connect an enormous number of devices. For insurance, that means real-time data collection, improvements in customer service, and the rise of personalized products.

To understand how this is happening let’s have a look at what 5G is. What does it entail? Its areas of impact in insurance, and of course, notable examples we can see today.

What exactly is 5G?

First, let’s break it down. 5G is the fifth generation of wireless technology, and it’s a big leap forward from 4G. It offers three key improvements: faster speeds (up to 100 times faster than 4G), lower latency, and higher bandwidth (meaning more devices can connect at the same time).

To put that into perspective, the potential download speed for 4G was 1 Gbps, while its latency, or “lag,” was between 60 and 98 ms. 5G promises to achieve—and is already achieving—download speeds of up to 20 Gbps and a latency of less than 2 ms.

Though telecoms began rolling out the tech in 2019, it has become mainstream in the last three years. At first, only new flagship devices supported it, but now even budget phones are released with the infrastructure to tap into 5G towers.

For consumers, this means everything from streaming Netflix to operating smart home devices becomes smoother and faster. But for industries like insurance, it opens up a whole new world of possibilities, allowing them to tap into cutting-edge tech like the Internet of Things (IoT) and Telehealth.

Applications in insurance

 1. Telematics and Usage-Based Insurance (UBI)

Telematics refers to the technology used to collect driving data, like speed, braking patterns, and miles driven. Usage-based insurance (UBI) relies on this data to offer personalized premiums.

If you’re driving a car that’s equipped with a 5G-connected telematics system, the insurer receives real-time data about your driving habits—accelerating, braking, even the way you corner. This data enables insurers to assess risk instantly and offer tailored premiums based on how you actually drive.

Take Progressive’s Snapshot program, for example. It already uses telematics to offer personalized rates, but with 5G, insurers can get more accurate data faster, meaning safer drivers can be rewarded almost in real-time.

 2. Claims processing and underwriting: Speeding things up

No one enjoys filing an insurance claim, but 5G has the potential to make the whole process faster and smoother. With instant data transmission, insurance companies can automate much of the claims process, reducing the time it takes to get a claim approved.

Picture this: You’re involved in a minor car accident. Thanks to 5G, your insurer can use real-time data from your car’s sensors to assess the damage instantly. Your claim could be processed and settled before you even leave the scene.

Lemonade, an insurtech company, is already using AI to handle claims in seconds. With 5G, this type of service will become even more common and reliable.

 3. IoT and smart insurance

5G is the backbone of the Internet of Things (IoT), which refers to the network of physical devices connected to the internet. Think smart thermostats, health trackers, or even refrigerators that can place grocery orders for you. These devices collect vast amounts of data that can be used by insurers to assess risk more accurately and offer personalized coverage.

Imagine a smart home system connected to 5G that monitors everything from water leaks to fire risks. Insurers can use this data to adjust your homeowner’s insurance in real-time. If your system detects a higher risk of water damage, your policy might automatically increase coverage.

In health insurance, wearable devices like smartwatches could provide real-time health data to your insurer. If you’ve been hitting your fitness goals, you might get a discount on your premium, all thanks to 5G’s ability to instantly transmit this data.

 4. AR, VR, and customer experience

5G also promises to improve how insurers interact with their customers. Augmented reality (AR) and virtual reality (VR) are becoming more popular in customer service, and 5G will make them even more seamless.

Imagine a customer having a virtual walkthrough of their home with an insurance agent—entirely online—thanks to 5G-powered VR. This could be used to assess risk, suggest improvements for safety, or even settle claims for damage. Some insurance companies like Sadas are already experimenting with VR for training adjusters, but with 5G, it can become a common practice.

 5. Embedded insurance and real-time offers

Last but not least, embedded insurance—where insurance is seamlessly integrated into other purchases—is another area 5G will impact.

If, for example, you’re about to rent a car. As soon as you’re in the vehicle, 5G allows the rental company’s system to instantly communicate with your insurer. Within seconds, you could receive a personalized offer for temporary car insurance, specifically tailored to the risk factors of that trip.

This “insurance on the fly” model is already in its infancy with companies like Cover Genius, but 5G will make it much faster, more efficient, and more customizable.

Bottom line

The future of insurance looks promising, and 5G will be a big part of that change. With personalized premiums based on real-time data, faster claims processing, and more accurate underwriting, 5G will make insurance smarter, quicker, and more customized for each person.

As this revolution continues to unfold, the relationship between 5G and insurance will become an everyday part of how we protect ourselves and our assets in a hyper-connected world.

The insurance sector can no longer defend itself against these risks using the same old tactics.

Legal misuse in the insurance business is a long-standing problem that has been slowly spreading throughout the sector for many years. It is neither new nor particularly recent. Currently known as social inflation, the consequences are worse and the concept of “tort reform” appears illusive.

As per a study carried out by Munich Reinsurance America, Inc. (Munich Re U.S.) and the American Property Casualty Insurance Association (APCIA), approximately 86% of Americans concur that state and federal lawmakers ought to tackle the malpractices in the legislation. The insurance sector can no longer afford to ignore this issue and pass on the accompanying costs to policyholders, nor can it continue to rely on present methods and solutions.

A look back at the evolution of ‘social inflation’

In a 1977 letter to Berkshire Hathaway stockholders, Warren Buffett utilized the term “social inflation” for the first time, defining it as “a broad definition by society and juries of what is covered by insurance policies.” In a 2010 whitepaper, reinsurer PartnerRe clarified the definition, explaining that social inflation is the rise in insurance losses brought on by:

The following factors have been observed: higher jury awards; wider mistrust of large corporations; more liberal treatment of workers’ compensation boards; increased use of social media; growing attorney involvement in claims; social developments that impact jury members and result in very high jury awards; and widening income disparities.

Today’s operating climate has gotten much tougher for carriers, on top of the abuses that have all continued to get worse. Consumers and regulators are starting to fight back after record rate rises in 2022 and 2023. To reduce costs and boost growth, an increasing number of insurers have stopped renewing property and vehicle policies in unprofitable states and, in certain situations, have pulled out of the market altogether until rates drop.

The longer tail of liability claims hangs over multi-line carriers like a dark cloud as they brave the anticipated more active hurricane season of 2024 and step out from under the shadow of general cost inflation. Considering the long-tail effect casts doubt on reserve accuracy.

One of the many effects of social inflation is pressure on settlements to increase, such as fear of unfavorable trial verdicts. Higher plaintiff awards generally and jury verdicts of $10 million or more, dubbed “nuclear verdicts,” can force insurers to settle disputes more frequently and for larger sums than they have historically, which can alter both reserving and loss payment trends.

According to AM Best, the insurance industries most impacted by social inflation include commercial auto, directors’ and officers’ liability, professional liability, and product liability.

Challenges posed by litigation funding

Around 2015, lawsuit funding emerged, adding to the financial difficulties already posed by the aforementioned. By using a third-party funding organization, litigants can pay their litigation or other legal fees in exchange for a sizable share of any award or settlement. This technique is sometimes referred to as litigation funding or legal financing.

Funding for litigation has the impact of promoting cases and higher settlements that might not have been possible otherwise. A recent RAND Research Report lists the following as some outcomes of this trend:

• A rise of 10% in 19 states’ yearly new court filings per capita between 2012 and 2019.

• In 2019, a significant proportion of cases (64%) resulted in a verdict in the plaintiff’s favor, an increase from 53% in 2010.

The funding for lawsuits has grown dramatically in the last few years. There have been an estimated $15.2 billion invested in commercial litigation in the United States alone, making it a multibillion-dollar sector globally.

Numerous finance companies, some supported by private equity investors, are active worldwide. They can be classified as public or private. At a compound annual growth rate (CAGR) of 13.2% through 2028, the global litigation funding market is projected to reach a valuation of $18.2 billion in 2022. By 2032, the market is expected to have grown to $24.7 million from $13.7 million in 2023, according to some estimates.

Wisconsin, West Virginia, Indiana, and Montana are the only four states with legislation pertaining to litigation financing.

According to survey results released in March 2024 by Munich Reinsurance America, Inc. (Munich Re US) and the American Property Casualty Insurance Association (APCIA), most Americans are unaware of the detrimental effects plaintiff lawyers’ strategies—such as deceptive advertising and the use of third-party litigation funding—have on their household expenses through the “tort tax,” regardless of whether the household is involved in civil litigation. Over 2,000 American individuals were interviewed for the poll, which was carried out by The Harris Poll.

Many Americans are also unaware, according to this research, that the plaintiff lawyer keeps a sizable portion of settlement or judgment awards, with a substantial portion going to investors who have no connection to the claimant and are only looking to benefit from their misery. After realizing this, most Americans (86%) concur that state and federal legislators ought to address the injustices inside the American judicial system.

Role of attorneys

Due to their large advertising budgets, plaintiff law firms that focus on personal injury lawsuits are growing across the country and bringing on new customers. With over a thousand attorneys and locations throughout all states, Morgan & Morgan is the biggest law practice of its kind in the nation.

Trial lawyers in the United States invested almost $2.4 billion on regional print, radio, billboard, and television advertisements last year. Not long after even a small accident, claimants are deluged with lawyer cold calls. Since they often receive between 30% and 50% of settlement funds, plaintiff attorneys have strong financial incentives.

One important indicator of changes in the average claim settlement value is the percentage of claims filed with an attorney. Increased legal fees contribute to higher claim costs in several ways, such as longer claim cycles, larger defense expenditures, and eventually higher settlement sums. These instances tend to inflame the situation by drawing attention to the benefits that consumers may receive from suing insurers in this way.

According to a research study conducted in 2023 by LexisNexis Risk Solution, of those who employed an attorney in connection with motor insurance claims, 57% decided to do so before filing the claim, and 71% stated the attorney pushed them to pursue further care.

According to a Sedgwick survey, 55% of commercial auto claims that are litigated had an attorney involved either prior to or on the same day as the report to carrier date. Just four years ago, this measure was 43%. In the meantime, lawyers become involved in 67% of disputed cases within the first 14 days of filing.

How the insurance industry is responding

When all these issues come together, carriers can no longer afford to watch helplessly as their profitability declines and the company becomes unviable. Increasing numbers of lawsuits, jury verdicts, and the intensity of claims all drive up liability expenses. Premiums are how consumers and businesses are made aware of all of this.

To distinguish social inflation from other contributing components, further research is necessary due to a complex interplay of forces. Any coordinated sector reaction against litigation misuse is still lopsided by a large margin, even though the insurance business has led the charge on tort reform laws in multiple states.

However, different business executives have different opinions about the best ways to counteract it. The chair and CEO of Chubb, Evan Greenberg, has stated that one of the main causes of the skyrocketing expenses of jury verdicts is societal attitudes that pit small businesses against large American enterprises.

At the S&P Global Ratings 40th Annual Insurance Conference, Greenberg told insurers, “We are not the sympathetic face to show” to change those sentiments. He noted that there will not be a federal solution to social inflation and stated that corporations are now driven to spearhead wars that will be fought state by state and county by county.

What’s next: A call for action

The insurance business can’t continue to absorb and pass on the associated costs to policyholders, nor can it rely just on present tactics and solutions to this challenge. Tort reform is a laborious, sluggish process that does not address the trends of today.

More carriers are anticipated to step up and start implementing fresh, all-encompassing short-term tactics to actively tackle societal inflation. These initiatives will probably involve taking steps to hinder the plaintiff bar in troublesome areas, preventing litigation from the start, strengthening legal defenses in their entirety, and possibly assuming greater risk via trials.

The APCIA and other insurance industry associations will be crucial in enabling carriers seeking to implement best practices to share information with one another and in broadly endorsing legal tort reform as a means of securing the industry’s long-term health and sustainability.

Now is the best time of all to get started.

“To err is human, to forgive, divine.”

This famous quote by Alexander Pope captures the essence of human fallibility—a quality that, for centuries, has influenced our decisions, actions, and the systems we create.

Yet, in the age of Artificial Intelligence (AI), where machines take on roles once reserved for human judgment, the notion of error takes on new dimensions. AI, with its promise of precision and efficiency, is not immune to mistakes, nor is it free from the biases and ethical dilemmas that arise from its very design.

These days, artificial intelligence finds use in many fields, including insurance. From redefining underwriting practices to streamlining claims processing and enhancing policy administration, insurance companies have utilized – and will continue to utilize – AI in their operations.

Biases

Humans are inherently flawed but that’s actually a good thing. AIs on the other hand are designed to be perfect. Perfect isn’t necessarily good.

One instance is when AI doesn’t consider all relevant information when making a decision. AI systems are usually trained on vast sums of historical data. While it wholly makes use of this, this can lead to overgeneralization and the perpetuation of existing biases.

Consider the example of an Applicant Tracking System (ATS) powered by Artificial Intelligence designed to screen job applicants. The AI, trained on historical data, might perfectly match candidates to past successful hires, leading to a biased selection process. If the historical data reflects past biases, like favoring certain demographics, the AI could end up perpetuating those biases without considering a candidate’s potential to break new ground or bring fresh perspectives.

Here, the AI’s “perfect” decision-making is flawed because it lacks the human ability to see beyond data and recognize the value of diversity and innovation.

Privacy and consent

Data privacy is also another issue that sees lawmakers at odds with several tech firms.

Cerebral, a telehealth Insurtech was fined over $7 million over reports that it revealed user’s personal information to third parties while recently T-Mobile was fined over $60 million for a data breach that exposed sensitive customer information during its merger with Sprint back in 2020.

When Artificial Intelligence systems are trained on or use improperly secured data, it not only breaches privacy but also erodes customer trust in the provider. These concerns are further compounded by not knowing how AI systems are trained or where their data comes from.

Companies often provide vague statements, such as “general public information” or, even worse, “from the internet,” without clearly disclosing how the data is collected or how it will be used.

Lack of accountability

Determining who is accountable when Artificial Intelligence systems make errors or cause harm is a challenging ethical issue.

When an AI-driven decision in insurance leads to an adverse outcome – such as the denial of a legitimate claim or the inappropriate cancellation of a policy – who should be held responsible? Is it the insurer, the AI developer, or the data provider?

A similar conundrum was observed during the CrowdStrike Saga last month.

Imagine an AI system that incorrectly flags a life insurance policyholder as deceased, leading to the wrongful termination of their policy. In such cases, the affected individual might face significant difficulties in restoring their coverage. The question of accountability becomes murky—should the insurance company take full responsibility, or should the blame be shared with the AI developer who provided the flawed algorithm?

Impact on employment

The integration of AI into insurance operations is also reshaping the job market, albeit negatively.

Roles traditionally held by underwriters, claims adjusters, and customer service representatives are progressively being automated, leading to job displacement.

Where do we draw the line between maximizing profits and preserving the livelihoods of those whose jobs are at risk?

Back in October last year, GEICO laid off 2000 of its employees, which accounted for a 6% reduction in its workforce.

“This would allow the company to become more dynamic, agile, and streamline its processes while still serving its customers,” the company memo from CEO Todd Combs stated.

Bottom line

As Artificial Intelligence becomes more entrenched in the insurance industry, the ethical issues surrounding its use demand careful consideration.

Today, AI’s precision and efficiency are very much celebrated. However, it’s crucial to remember that perfection, while desirable, is not always the goal. The flaws present in human judgment – while often seen as imperfections – contribute to creativity, empathy, and the nuanced decision-making that machines struggle to replicate.

The quest for flawless technology must be balanced with the recognition that human fallibility brings valuable perspectives and innovation. The future of insurance, and many industries, will hinge not only on the capabilities of Artificial Intelligence but also on our ability to address these ethical challenges with integrity and foresight.

The insurance process was once sluggish and paper-based. But things have altered in recent years. Technology has transformed countless industries, and insurance is no exception. Today, the sector is going even further. A new breed of insurers is emerging – digital-only companies promising speed, convenience, and lower costs. These startups challenge traditional insurance giants by operating entirely online. But can they deliver on their promises? Are these digital-only insurance companies the future, or just a flash in the pan? Let’s get into it.

The rise of digital-only insurance

Over the last decade, we’ve seen a steady rise in online-only insurance companies. It used to be that everyone would choose from a select few familiar insurance companies, but today the picture couldn’t be more different. Whether it’s auto, home, or even pet insurance, the options available to consumers have exploded. This increased competition has led to a more dynamic marketplace with a wider range of policies and prices to choose from. But how did we get here? Several factors contribute to this trend of more insurance providers, particularly more online-only insurers.

Firstly, the modern consumer is increasingly tech-savvy and demands quick, convenient services. Digital-only insurers cater to this demographic by providing seamless online experiences, from obtaining quotes to filing claims. This aligns perfectly with the expectations of a generation accustomed to digital interactions in other areas of their lives.

Secondly, technological advancements have significantly reduced the barriers to entry for new insurance players. Advances in artificial intelligence, big data, and cloud computing have created powerful tools, reducing the need for large teams of specialists and lowering the overall cost of building and running an insurance business. In the past, building an insurance company required significant capital investment in physical infrastructure, such as offices, claims processing centers, and a large workforce. Not today. Cloud computing allows insurance companies to operate without the overhead of maintaining physical data centers, while artificial intelligence can automate many routine tasks, such as claims processing and customer service inquiries.

Economic pressures also play a role in the rise of digital-only insurance. Traditional insurers often grapple with rising operational costs and claims expenses. In contrast, digital-only models tend to have lower overhead, allowing them to offer more competitive premiums. This cost advantage has attracted a growing customer base.

So that’s why we see more online-only insurers, but what benefits do they offer, exactly?

Benefits of digital-only insurance

Digital-only insurance companies offer a new approach to buying insurance. These online-only providers claim several advantages.

• Lower costs: No longer burdened by the costs of physical branches and large staff numbers, digital insurers may be able to offer more competitive premiums. With lower overheads, they can pass some of those savings on to the customer.
• Speed and efficiency: Quicker quotes, policy purchases, and claims processing are often touted benefits of digital platforms, saving customers time. As to why – digital platforms usually eliminate paperwork and manual data entry and aren’t held back by legacy systems, like many traditional insurers.
• Improved customer experience: Many focus on providing a seamless online experience with features like 24/7 access and mobile apps. Intuitive interfaces and user-friendly design make it easy for customers to manage their policies. This includes updating information, renewing policies, and tracking claims status.
• Data utilization: Digital insurers can leverage data to understand customers better and potentially offer more relevant products.
• Flexibility: Digital insurance platforms often offer flexible payment options, allowing customers to pay premiums monthly, quarterly, or annually, and to choose from a wide range of coverage levels.

Drawbacks of digital-only insurance

While digital-only insurers offer certain advantages, there are also potential drawbacks to consider.

• Limited human interaction: Not all insurance queries are straightforward, and sometimes it’s easier to speak to a real human to sort out the problem. This is often more difficult with only online providers, and sometimes it’s almost impossible.
• Technological reliance: Digital insurers are heavily dependent on technology. System failures or cyberattacks can disrupt services, leaving customers without coverage or facing delays.
• Data privacy concerns: Handling sensitive personal and financial information online carries risks. Customers must trust that digital insurers have robust security measures in place to protect their data. With many of these companies being start-ups, they may not have the longevity or maturity to know how to handle data securely.
• Lack of physical presence: Without physical offices, customers may find it inconvenient to handle certain matters, such as inspecting damaged property or discussing complex insurance needs in person. This can be a real problem if the insurance company disputes digital evidence (photos) but won’t allow another avenue of verification.
• Potential for algorithm bias: Some decision-making processes, like underwriting or claims assessment, may rely on algorithms. There’s a risk of bias in these algorithms, leading to unfair outcomes for customers.

Will digital-only insurers replace traditional insurers?

Digital insurance companies are changing how we buy insurance, but they probably won’t completely replace traditional insurers. Instead, they are forcing incumbents to adapt and evolve.

Traditional insurance companies possess several inherent advantages. Their established brand reputation, extensive customer base, and deep financial reserves provide a solid foundation. Additionally, complex insurance products often require in-person consultation and personalized service, areas where traditional insurers excel. Many customers are always going to prefer the security that comes with a well-established company, especially when dealing with potentially large financial risks. These customers will choose an insurer with real humans they can speak to, even if it means paying more.

However, the pressure to compete with digital-only rivals is driving significant changes. Traditional insurers are investing heavily in technology to improve customer experience and efficiency. Online quoting tools, streamlined claims processes, and 24/7 customer support through chatbots are becoming commonplace. Moreover, many are developing hybrid models that combine the best of both worlds, offering digital convenience alongside the option for face-to-face interactions.  

Here’s the bottom line. While digital-only insurers are reshaping the insurance landscape, the industry is not a zero-sum game. Traditional insurers, by embracing digital transformation and leveraging their strengths, can coexist and thrive alongside their digital counterparts. The future of insurance lies in a hybrid model that caters to the diverse needs and preferences of customers.

Today, you can have a doctor’s appointment, receive medical advice, and even get prescribed medication—all from the comfort of your home. Telehealth, once primarily used to serve rural and underserved populations, has now become an essential part of modern healthcare.

The COVID-19 pandemic, which saw much of the population under quarantine, along with consumer demand and rapid technological advancements, has accelerated the adoption of remote diagnosis and treatment. What was once considered a temporary solution is now the new standard in healthcare delivery.

This shift is transforming the healthcare landscape, influencing not only patient experiences but also how health insurance integrates with emerging technologies.

Let’s explore the growing role of telehealth and what it means for the future of health services.

What is Telehealth?

Telehealth is harnessing modern technology to deliver healthcare services remotely, fundamentally changing the way patients interact with healthcare providers. This approach includes a wide range of services, from virtual consultations and diagnostics to continuous monitoring.

In the past, telehealth was primarily targeted at those in remote locations—people who were out of the physical reach of hospitals and healthcare centers.

However, that’s not the case anymore.

Advances in technologies like Virtual Reality, 5G, and IoT-enabled devices like smartwatches have made it easier than ever to offer healthcare to anyone and everyone, right from the comfort of their home.

This convenience has broadened telehealth’s appeal, making it accessible to anyone, even healthy individuals who want to manage their health proactively.

Components of Telehealth

Telehealth comprises various elements that work together to create an integrated and seamless healthcare experience:

• Video conferencing: Enables real-time, face-to-face interactions between patients and healthcare providers.
• Remote monitoring systems: Allows continuous tracking of a patient’s vital signs and health metrics from a distance.
• Telehealth applications: Provide patients access to medical advice, appointment scheduling, and prescription refills via smartphones or computers.
• Digital communication platforms: Tools like secure messaging and email facilitate ongoing communication between patients and providers ensuring that care is continuous and responsive.

Together, these components bridge the gap between patients and healthcare providers, eliminating the need for physical presence. At the same time, this also maintains the quality and effectiveness of care.

Notable examples

As telehealth gains traction, several healthcare and insurance companies in the U.S. are leading the way by incorporating these services into their operations:

 1. Amwell

Amwell partners with healthcare providers and insurance companies to offer telehealth solutions. Large health systems, like the Cleveland Clinic, use Amwell’s platform to reach patients who may not be able to visit in person.

This approach improves patient access to care and helps manage healthcare costs by reducing the need for in-person visits and hospital admissions.

 2. Anthem Blue Cross Blue Shield

Anthem has integrated telehealth services into its health plans, giving members access to virtual care for non-emergency conditions.

Through partnerships with companies like LiveHealth Online, Anthem offers 24/7 consultations with doctors, prescriptions, and regular virtual check-ins to manage ongoing health conditions.

 3. Cigna

Cigna has introduced a virtual-first health plan that prioritizes telehealth visits as the initial point of care. This plan aims to reduce unnecessary in-person visits and provide members with a more convenient and cost-effective way to manage their health.

Cigna’s approach enhances patient engagement and improves health outcomes through the use of digital health tools and remote consultations.

 4. Oscar Health

Oscar Health, a health insurtech, has integrated telehealth into its core offerings. Members can schedule virtual visits directly through its app.

Oscar’s model caters to a tech-savvy population that prefers digital interactions over traditional healthcare models, emphasizing ease of use and accessibility.

To sum it up

The integration of telehealth into healthcare delivery isn’t just a trend; it’s a crucial part of modern medical practice.

By enhancing accessibility and efficiency, telehealth is revolutionizing how we receive and manage healthcare, establishing itself as a cornerstone of future health services.

Looking ahead, emerging technologies may bring even more practical applications to healthcare. For example, drones could simplify the delivery of prescribed medications directly to patients’ homes, while artificial intelligence, combined with advanced analytics, could be used to analyze viral strains and recommend effective treatments.