InSight: Neil Raymond, CEO of Pacific Prime, argues that Covid-19 spurs digital innovation in health insurance

Neil Raymond Founder and CEO of Pacific Prime

While the events of the past year have been nothing short of a challenge for the healthcare and health insurance sector, there have also been exciting developments in the form of rapid technological innovations. Neil Raymond, founder and CEO of Pacific Prime (, a global health insurance brokerage and employee benefits specialist, takes a closer look at these challenges and trends, which have been condensed from the brokerage’s State of Health Insurance Report 2021

As one of the most unprecedented health crises of our times, the Covid-19 pandemic shook national healthcare systems around the globe – many to the brink of collapse. It led to patients avoiding healthcare settings and delaying medical treatment, as well as changed their expectations of healthcare providers and health insurers moving forward. Simultaneously, the pandemic-induced economic downturn also dampened business confidence and increased financial hardships across the board.

From virtual consultations with medical professionals to technological adoptions on behalf of health insurers, digital innovations help deal with some of the challenges associated with the pandemic.

Telehealth apps are on the rise

Instead of going to see the doctor in person, people began turning to their smartphones. As a result, virtual consultations via telehealth apps for physical and mental health rose by a staggering 400% and 3,000%, respectively. The latter is unsurprising given that social distancing and lockdown measures increased mental health concerns.

Either way, the pandemic has clearly sped up telehealth adoption with half of insurers around the world currently offering telehealth with all their plans.

Not only does telehealth offer a more convenient access to medical services, but it can also integrate wearables and fitness tracking devices, leveraging personal data and offering customised services. As people are becoming more concerned about health and wellness, these digital health and wellness products will be increasingly coveted as they are focused on improving physical and mental health, as well as inspiring positive lifestyle changes. For example, AXA’s BetterMe platform offers physical and mental health services, as well as chronic disease management, for its policyholders in Hong Kong.

Digital adoptions are occurring at breakneck speed

In the past year, digital adoption in the global insurance sector grew 20% – across the entire insurance policy lifecycle. Likewise, global investment in the insurtech space also reached an annual high of US$7.1bn for 2020. These digital adoptions have been spurred by the pandemic, as insurers are increasingly looking for new and innovative ways to boost efficiency and lower costs in the long run.

From marketing to claims submission and beyond, Artificial Intelligence (AI) and big data is one type of technology that is changing the face of insurance. A key benefit will be the reduction of fraudulent claims.

Unlike traditional insurance claims, which rely on manual processing and are more prone to human error, AI-based systems leverage deep-learning technologies and data-driven techniques to speed up or even automate the claims process, thereby enabling real-time claims processing, as well as preventing or flagging inaccurate or fraudulent claims in a systematic way.

Another use of AI is within the healthcare sector. For starters, it can improve efficiency and speed when it comes to detecting and responding to future outbreaks.

Combining the outcomes of AI with blockchain technology will further facilitate medical professionals in treating patients safely and efficiently. As data becomes more usable, so will the world of genomics and gene editing that will lead to breakthroughs in developing cures for a range of human diseases.

Healthcare experience takes centre stage

The pandemic has also shifted priorities in terms of people’s healthcare experiences, making the need for high-quality, empathetic care more important. In line with this, environmental services (including sanitization of high touch-point areas, and especially patient rooms) in a hospital setting will take centre stage, as it has the potential to make or break a person’s overall healthcare experience.

In terms of their health insurance experience, policyholders will require both physical and digital services, signaling a move to ‘phygital’ – a portmanteau of the two words. Even though more insurers are adopting digital services and distribution channels as their primary point of customer engagement, physical experts are still irreplaceable as they can offer advice on complex, real-life decisions.

One of the challenges of these digital adoptions, such as telehealth and AI-based systems, is the need to adopt robust cyber security measures to guard against cyber-attacks and adhere to the growing number of data privacy regulations around the world. Failure to do so can result in monumental fines for insurers under regulations like the EU’s General Data Protection Regulation (GDPR) and regional equivalents, as well as erode trust on behalf of policyholders – something that is non-negotiable.

Health insurance outlook moving forward

Insurers will need to offer telehealth services, adopt digital technology, and consider the patient experience moving forward. Moreover, they will also need to make important changes such as including coverage during pandemics.

Unlike the pre-pandemic world, most regions (apart from Europe) are now expected to see fewer pandemic-related exclusions. In fact, many insurers are also offering Covid-19-specific insurance plans to cater to demand. One such example is in Thailand, where all foreign arrivals need to obtain mandatory Covid-19 insurance.

Insurers will also need to account for the post-pandemic rise in claims when patients feel comfortable visiting healthcare providers again. Mental health conditions are forecasted to take a larger share of the burden. Regarding cost of delayed treatment, the hardest-hit regions will be the ones with relatively stringent lockdowns, such as North America.

In the US, for example, the effects of delayed care could cost the healthcare sector anywhere between US$30bn and US$65bn annually. This could have significant trickle-down effects on insurers and health insurance costs in the years to come.

Speaking of costs, health insurance premium costs are expected to surpass last year’s increase in the approaching 2021/22 cycle. Uncertainty over the ongoing global health crisis has also led to demand for health insurance policies as healthcare expenses are anticipated to increase every year. One major demographic turning to health insurance products is younger, more health-conscious consumers.

The pandemic has not only catalyzed insurance digitalization, but also awakened the interest of younger generations in life, health, and other insurance products.

Regional-specific challenges and trends

Against the backdrop of the challenges and trends, there are also a few region-specific developments at play. To learn more about the global health insurance landscapes and regional ones in Asia Pacific, the Middle East and Africa, Europe, and the Americas, the Pacific Prime’s State of Health Insurance Report 2021 is free of charge.