From behind the times to cutting edge: Where health insurers are investing in tech upgrades

Health insurers' customers are increasingly tech-savvy and expect service to be available 24/7, just like with online shops.
(Image: JESHOOTS/pixabay)

Health insurers, according to a new report, are well aware that they’re behind the technology curve—and they’re making significant investments to fix that.

The report, from A.M. Best, summarizes findings from a recent survey conducted by the credit rating company and insights from other research. It says that health insurers are focusing on four main areas that are most in need of technological improvement:

  • Customer experience. Insurers must update and maintain their customer technology platforms to reach—and retain—a customer base that’s increasingly tech savvy and expects service to be available 24/7, just like online shops. The report also notes that these days, paper enrollment has largely been replaced by online enrollment, and direct mailings are at most a complement to online efforts.

RELATED: UnitedHealthcare debuts data-driven health navigator program for Medicare Advantage members


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  • Administrative and claims systems. Nearly every company A.M. Best rates is upgrading these legacy systems, which can pose business and cybersecurity risks if not modernized. As they go about upgrading, insurers may find that artificial intelligence and predictive analytics can help streamline various processes, which has the potential to improve sales and lower expenses.
  • Data aggregation and mining. To tap the full potential of its vast troves of data, the industry may need to combine the capabilities of both health insurers and “insurtech” companies. The former brings the power of scale to the table, while the latter boast computing power and machine-learning techniques. Combining those two capabilities “could change the typical insurance model,” but only if the data they’re analyzing is accurate—and past research has highlighted concerns about data quality.
  • Underwriting/new business systems. Investing in predictive modeling and other data mining technology can help insurers automate their underwriting processes and allow their sales teams to reach consumers directly through channels like social media. In addition, big data can offer a foundation for more accurate pricing. Yet many insurers have reported they’re still in the initial stages of developing these new data-driven models.

As insurers work on modernizing these systems, it’s critical for CEOs to not only facilitate organization-wide buy-in, but also to have an in-depth understanding of how technological concepts relate to overall business strategy, A.M. Best says. This is especially true given the potential for industry disruption.

“Companies that continue to evolve technologically will gain a substantial competitive advantage; competitors that don’t will suffer,” the report concludes.

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