How InsurTech is significantly contributing to health insurance in India

The rapid evolution of technology and digitization has dramatically reshaped consumer behaviour across sectors. This transformation has fuelled an era of technology-driven advancements across the financial services landscape, especially in the insurance sector. The global pandemic upheaval has altered perspectives on financial security, bringing in a noticeable shift in attitude toward insurance. This shift is especially evident in the heightened demand for health and life insurance. 

Despite the growing awareness in insurance, among certain demographics, a significant portion of India's 1.3 billion population, remains without any form of insurance coverage, especially in the health category. Both health and life insurance predominantly cater to the top 40-50 cities, leaving millions with the purchasing power but devoid of accessibility. Consequently, this market remains largely untapped, underscoring the significant role technology can play in broadening access and addressing the insurance gap. 

If we talk about the health sector, technological advancements and regulatory shifts are driving an evolution within India's health insurance sector. Insurers are embracing cutting-edge technologies, positioning themselves for a future that prioritizes efficiency and sustainability. The overarching aim of these transformative changes is to democratize health insurance, improve service standards for beneficiaries, enhance well-being of the consumers and ultimately reduce overall costs. 

Below are some significant aspects on how Insurtech is contributing towards the growth of health insurance:  

Automation in claim processing: The surge in healthcare claims has been putting in a lot of pressure on insurers, to handle them quickly. IRDAI regulations suggest that health insurance claims should be settled within 30-45 days, and without error. This leaves insurers and third-party administrators, to turn towards automation for streamlining claim processes in a faster and effective way. By using tech like Optical Character Recognition (OCR), Artificial Intelligence (AI) / Machine Learning (ML), GenAI (General Artificial Intelligence) Robotic Process Automation (RPA), insurers are witnessing faster claim settlements. Automation is not only cutting down the challenges with human error, but also making claim settlements accurate and real-time. Hospitals are also benefitting because they are getting paid faster. Automation is thus, changing the end-to-end process of claim settlement in the health insurance category.  

Enhancing Risk Assessment & Profiling: Technology is playing a growing role in continuous risk assessment for an individual, since lifestyle and behaviour cannot be assessed in one time; they involve people’s habits and their continuous change. AI and ML algorithms are leveraged to assess the risk profile of potential customers. By analysing multiple data points, such as age, occupation, medical history, and lifestyle choices, these algorithms can calculate the likelihood of an individual making a claim or engaging in risky behaviour. AI/ ML is increasingly being used for hyper personalization, risk based improving STP (Straight through processing), personalised- need based product and reducing cost of processing /policy issuance to large masses.  

Improving consumer journey: Health insurers are ramping up their capabilities by embracing cloud-based solutions to enhance their flexibility and efficiency. A remarkable trend is the shift of entire core systems, including production data centres, to the cloud. Alongside this move, insurers are harnessing the power of AI/ML and advanced analytics to revolutionize their service framework, ultimately improving the consumer journey. The AI/ML transformation is helping multiple aspects, from issuing policies to employing analytics-driven insights for strategic selling and impactful outreach. AI/ML solutions are proving instrumental in diverse applications, including fraud detection, illustrating the extent of their utility in the insurance landscape. 

Providing more affordable insurance products: The highly competitive Indian health insurance market, is tapping into telemedicine and home healthcare to prevent expensive hospital stays and emergency visits. Using micro-data analytics, insurers are crafting tailor-made healthcare coverage, aligning with individuals' financial capabilities and needs, especially for those residing in Tier 2, 3 cities, and beyond. Through the utilization of data analytics and personalized tools, select insurers have rolled out cost-effective health insurance plans offering sum insured amounts of INR 2 lakhs and 3 lakhs, this will be transformational in the healthcare industry in the years to come. Furthermore, the industry is witnessing a gradual adoption of innovative technologies such as blockchain, RPA, WhatsApp integration, and AI chatbots. These technologies aim to drive down administrative costs while enhancing the overall efficiency of health insurance operations. 

Fraud, Waste & Abuse Intelligence (FWA): Healthcare insurance fraud and abuse are costly problems that often fly under the radar but drive-up insurance costs. This leads to people paying more for their coverage, facing increased out-of-pocket expenses, and receiving fewer benefits. AI-powered investigations can be game-changer in this category. By tapping into various data sources like financial records and digital communications, AI processes massive amounts of information swiftly and with precision. Its advanced algorithms uncover hidden connections and trends, drastically cutting down the time needed for investigations. Thus, technology can play a pivotal role in curbing fraudulent activities in health insurance. 

The insurance industry is undergoing a seismic transformation driven by technology, and this momentum is set to surge even further in the next two years. With continuous innovations and swift technological progress in health insurance, the Insurtech landscape is poised for significant disruptions. Companies which are embracing these emerging technologies are poised not just to adapt but thrive amidst this transformative wave.  

About the Author 

Layak Singh is the Co-Founder of Artivatic.AI, a global risk and decision-making platform that automates human decisions in insurance and healthcare sectors, empowering them through artificial intelligence. He is an IIT Kharagpur alumnus and holds B.Tech in Manufacturing Science and Engineering. He is a serial entrepreneur and has been active in the AI space, working extensively to find AI-based solutions for the insurance and health sectors. Sensing the need for an end-to-end smart AI infrastructure for banks and financial firms, Layak Singh founded Artivatic in 2017 with Puneet Tandon, a New Jersey Institute of Technology (US) alumni. The company assists insurance companies to build personalised risk profiles of customers, track and understand their financial and behavioural journeys, and develop real-time intelligence based on those patterns. 

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