We are living in a new technological revolution. One took us out of the fields and into factories. Another took us out of factories and into the service industry. It is possible to discuss the merits of them all, but overall, each revolution advantages many and leads to human progress.
The insurance industry – be it health, auto, property, or any other, is going through its own technological revolution due to the advent of smart tech. This article will consider some of the improvements tech is making to insurance and how it is reducing premiums including getting to grips with smart health insurance.
Reshaping health insurance as we know it
Healthcare costs are often astronomical whether privately or socially provided. The growth of smart tech is improving healthcare provision in all areas including administrative. It is also changing how individuals engage with the healthcare system and approach premiums.
According to MIT Enterprise Forum the big focus areas for the integration of smart tech and healthcare are:
- Distribution modeling
- The Internet of Things (IoT)
- Big data
- Artificial Intelligence (AI)
To go into all of these in a good amount of depth would be the makings of a good book. However, it is safe to say that large organizations struggle with distribution and administration. The use of these devices and programs can make systems more efficient and responsive. Big data, for example, can identify trends and determine the most likely places certain types of medication, technology, and services will be required.
How does this reduce premiums? To be short – cost effectiveness. Insurance is predicated on the hope that it is never needed but if it is, there is provision to help. Healthcare providers need to be able to provide the best possible services while remaining under budget. Distribution effectiveness reduces waste, reduced administration reduces costs overall, smart technology including integrated devices and AI-surgeons improve provision quality and reduce legal compensation claims. Overall this reduces costs which can therefore be passed on to the consumer leading to an uptake in premiums.
Consumer-led premium reductions
It is often thought that supply and demand (market pressure) or tight central regulation are the core drivers for health premium drivers. They are important, but one of the great things about the Internet and smart technology is the empowerment of the individual consumer.
Health insurers including the Qantas health fund are recognizing that people are now better able to take preventative measures. Now there are apps to help measure steps taken, calories consumed, to measure correct nutritional intake and so on. DNA testing goes beyond looking for ancestors and can help identify underlying issues which people, as individuals, can tackle.
In theory, by working with technology, individuals are able now to take better preventative measures and to keep themselves healthier, thus reducing the risk for health insurers.
How smart tech is saving lives and reducing premiums elsewhere
In addition to direct healthcare advantages, smart technology is improving two vital areas and reducing insurance premiums at the same time. These are in the areas of auto insurance and home/contents insurance. Let’s see how.
Already many cars come with black boxes which record vital data letting insurance companies know if a driver is responsible or not. Now crash avoidance systems, parking assistance cameras, and automated braking systems are reducing premiums by up to a third too. Self-activating safety systems are reducing auto-related fatalities and injuries as well as compensation claims, which in turn reduces risk and premiums.
The same is true for homes. The Internet of Things allows people to check security cameras while out of the house and it allows them to regulate appliances via a smartphone or tablet computer. Increased security along with integrated, communicating, and controllable devices, reduce risks for insurance companies and therefore premiums. It also improves accessibility for people with mobility and disability issues, as well as providing peace of mind for homeowners.