This column must start with a warning: much of what I am about to say will sound far-fetched to some readers. But all the technology I am about to describe exists today and will become widely available over the next few years. It could provide an unparalleled opportunity to transform the group risk and group healthcare markets.
Just as smartphones become ubiquitous, so the technology to replace them is emerging. In May Silicon Valley technology guru Mary Meeker called the end of the smart phone era as approximately ten years away. The next big trend will be wearable technology, with Google Glass and perhaps the much-rumoured Apple iWatch being very early examples.
Increasing numbers of consumers are already wearing small devices to monitor their exercise and sleep patterns, their blood pressure and a whole range of biometric data. In the very near future this could be extended to include areas like stress levels, respiratory patterns, blood sugar and many other key indicators as the extent of data that can be monitored in this way is rapidly increasing. Such devices already have the ability to supply data regularly to a central point, automatically, on a daily basis. Perhaps surprisingly, as recently as three months ago a survey by Centre for Creative & Social Technology, Goldsmiths, University of Londonfound as many one in three UK consumers would be happy to send information from a wearable device to a healthcare provider in this way.
I found the session at the recent Protection Review conference that debated the merits of both producing and advising on integrated medical and life assurance products fascinating. Whilst recognising why historically, because of complexity, each of these areas have tended to operate independently, there are valid arguments for synergies. Add to this the ability to receive a regular stream of health data from the customer and this could provide the potential for a whole new range of integrated medical and risk products, where the objective would be to identify issues before they are even problems and take preventative action. This could provide an early warning system for potential illnesses, but also trigger the financial resources to fund early treatment to avoid major problems.
One thing I have learnt from my extensive US travels is that because employers end up footing the bill for so much of the cost of healthcare they are far more willing to invest in programs that will result in improving the health of their staff. Wellness programs and staff screening as part of benefits packages are far more prevalent in the US than the UK.
There is already clear evidence that preventive screening can drastically reduce the long-term cost of healthcare and the potential to reduce the risk of major group risk claims is obvious. Using screening processes employers in the US are already able to achieve significant reductions in their medical insurance premiums.
The procession of horror stories about the NHS does little to inspire confidence in the state system. Perhaps one of the best ways that the industry could contribute to society would be the development of a new generation of integrated healthcare screening and insurance programs that could enable employers to provide valuable peace of mind for their staff whilst at the same time having a far better understanding of the overall health of their workforce. In so doing we would be developing valuable new products and services for our industry.
Few issues can be more important for the financial services industry as a whole than addressing the public loss of trust that has clearly taken place over the last three decades. The potential to use a combination of biometric screening from wearable devices as a form of telematics must be huge. It could potentially reposition the whole of the risk industry, enabling organisations to play a positive role in helping our clients identify potential issues before they take place and providing the financial resources at the right time to make sure potential risks do not become real problems for employees.
Applied biometrics and telematics provide the opportunity for insurers to deliver really valuable insight to the health and wellbeing of an organisations staff. Which company would not want to know if an executive was regularly suffering an unhealthy level of stress? What would be the value of a system to an employer that could identify the likely onset of heart problems in advance and resource the cost of the necessary investigations to diagnose the extent of a potential problem? Which life or critical illness underwriter would not be happy to pay for the cost of medical diagnosis and treatment if it could drastically reduce the cost of a critical illness or life claim?
These emerging technologies could help us offer a whole range of new ways to help our clients. I believe they are worth exploring.