Drivers for Health Insurance Product Innovation. Dr. Noel Coutinho RGA Services India Private Limited.

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Phillip Maxwell
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1 Drivers for Health Insurance Product Innovation Dr. Noel Coutinho RGA Services India Private Limited. January 5, 2012

2 Innovation Ideas Technology Processes Products Better / More Efficient Sevices Society Markets Government 2

3 Key drivers Innovation for health insurance products Customer needs and their financial ability to pay Health needs change through a life cycle; products tend to be static Move from treating acute health episodes to one that keeps persons healthy 3

through a life cycle; products tend to be static Move from

4 Dissecting the key drivers Factors influencing innovation in health insurance Local health system Antiselection risk Regulations Current local health products Data Reinsurance Sales drivers Purchase drivers Business volumes 4

Antiselection risk Regulations Current local health

5 Dissecting the key drivers Factors influencing innovation in health insurance Local health care systems Access to and utilization of public health care systems Primary v/s complimentary / supplementary covers Current health products Identify gaps and saturations in current products Pros and cons for various stake-holders Sales drivers Commissions Simplicity of sales and servicing Need of the customer 5

supplementary covers Current health products Identify gaps and saturations in current products Pros

6 Dissecting the key drivers Factors influencing innovation in health insurance Purchase drivers Features and differentiation Cost of the product Need Immediate protection or savings for future medical costs Availability of data Quality and quantity of data Drivers would be limiting risk while gathering experience Anti-selection risk Innovation in product involves opening up to risk Drivers would be limiting or controlling risk 6

Availability of data Quality and quantity of data Drivers would be limiting risk while gathering experience

7 Dissecting the key drivers Factors influencing innovation in health insurance Regulations Type of products allowed Price and features Reinsurance Appetite for risk Experience with products Business volumes Appeal for the product Ability to sustain volumes and continuously bring in new business 7

Reinsurance Appetite for risk Experience with products Business volumes

8 Analyzing some common products Hospital Cash A good standard product that provides fixed sum Basic drivers for innovation Supplementary cover where people relied on public systems Not susceptible to inflation, but only utlization Drivers for further product innovation differentiate the product Double and triple payouts for specific circumstances - accidental claims, ICU stay Lumpsums for certain events Alterations in waiting periods and deferment periods What can be done further Not much from a product point of view Return of premiums 8

differentiate the product Double and triple payouts for specific circumstances - accidental claims, ICU stay Lumpsums for certain

9 Analyzing some common products Surgical Cash Product that in current form may meet in a limited way the needs of the insured Applicants betting on the type of illness they will develop and procedure they would need Ever expanding list and its complexities Basic driver for innovation Supplementary cover in event of undergoing certain surgeries Drivers for innovation Differentiation of product - Increase in number of surgeries covered Surgical techniques continuously develop and hence the lists will always be out of date Providing cover for all surgical procedures at an appropriate level of benefit 9

cover in event of undergoing certain surgeries Drivers for innovation Differentiation of product - Increase in number of surgeries covered Surgical

10 Analyzing some common products Medical Reimbursement Complex product that has potential to meet the customers real needs. Drivers for innovation so far Desire to differentiate policy has led to insurers adding benefits Inability to ascertain an accurate medical history has led to development of disease specific waiting periods Cost containment drivers sublimits and co-pays Real drivers Adapt to changes in medicine and medical technology Guidelines and protocols for medically necessary treatment Effective use of network of hospitals 10

medical history has led to development of disease specific waiting periods Cost containment drivers sublimits and co-pays Real drivers

11 Health Product Innovation? Product or Product and Service Service Product 11

12 The service factor The other side of the coin Customers have become more diverse and more demanding, wanting service offerings, experiences and communications increasingly on their own terms. Accenture Healthcare conducted a survey of customer attitudes toward the customer service practices of US-based health insurance providers. A web-based questionnaire, surveyed 1,000 customers in the US between late December 2010 and early January

Accenture Healthcare conducted a survey of customer attitudes toward the customer service practices of US-based

13 Findings of the survey Is India different? Customers are generally satisfied with products But high degree of dis-satisfaction with services Satisfaction levels to products will not translate into loyalty and revenue opportunity Expectations increase rapidly; customers want ease and support Customers are more value driven than cost driven (?) As the consumerism trend in health care increases customer service performance will emerge as a source of differentiation and contributing factor to loyalty and retention 13

14 How do we innovate on services? Ease of sale right products for the right channel Simpler and effective underwriting Policy wordings adapted for the local market & use of illustrations Ease of claims submission with fast and accurate assessment Identification of trusted hospitals Sharing of information on fraud Better communication with customers 14

Policy wordings adapted for the local market & use of illustrations Ease of claims

15 Way forward Customer centric innovation Insurers will need to Identify unique and unmet customer needs, Define segment-specific plans for all customer touch points, and Develop the operational capabilities to deliver these plans (services) and Monitor and learn from them. 15

plans for all customer touch points, and Develop the operational

16 Innovation has to be collaborative and effective 16

17 Thank you for your attention. 17

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