Premium perks: Wearables, apps are set to transform health insurance

The health insurance sector could be in for a major transformation as technology-backed wellness regimes become the order of the day. Moving away from actuarial data, much of the health insurance benefits in future might be linked to real-time data from health apps and wearable devices.

Last year, the Insurance Regulatory Development Authority of India (IRDAI) invited proposals for products under the sandbox regulatory regime. Regulatory sandbox usually refers to live-testing of new products in a controlled environment. It is similar to a pilot project. The insurer is free to withdraw from the project in case it fails to succeed, and provided it doesn’t impact the customers who have already purchased a product.

IRDAI has so far received 173 proposals, most of which incentivise wellness in the health insurance space through the use of apps and wearable devices. Many health insurance companies are already experimenting on these lines. For example, Aditya Birla Health Insurance has come out with a concept called Active Dayz. A customer needs to wear a device and earn Active Dayz points, which can be redeemed while paying the insurance premium for the next year. The customer can earn an Active Dayz by taking 10,000 steps in a day.

“Our Activ Health app has resulted in significant business benefits, and lesser claims,” says Mayank Bathwal, CEO, Aditya Birla Health Insurance. “We have been leveraging several technology solutions such as mobile apps, cloud computing, wearable devices and data integration with other healthcare entities to create an edge and deliver a seamless experience to our stakeholders,” he adds. 

However, the current regulations carry certain restrictions on such schemes. Insurers are allowed to let customers redeem points earned through activity against the renewal of premium, diagnostic tests, buying medicines, consultations with doctors and buying of health supplements.

Under the regulatory sandbox, health insurance companies are offering much more for a healthy lifestyle. For example, GOQii, a tech-enabled, preventive healthcare platform, has helped six companies in the health insurance space to get approvals under the sandbox.

GOQii has designed a co-pay insurance product for Bajaj Allianz, under which a customer can avail of a health insurance cover of up to Rs 5 lakh without paying any premium, provided they lead a perfectly healthy lifestyle, which is monitored through a wearable health device.

For example, if the insurance policy claim is for Rs 5 lakh, with a 50 per cent co-pay in the health insurance product, the policyholder pays only Rs 2.5 lakh and the insurance company pays the balance. If the policyholder is very active, his co-pay amount might come down to zero, which means the entire claim will be paid by the insurer. In this product, the co-pay can change every month, depending on the policyholder’s lifestyle as captured on the GOQii platform.

“Traditionally, health insurance in India has been based on old data. Now, we are moving away from actuarial to real-time data. This is a massive transformation, one where health insurance is based not only on reactive, but proactive days,” says Vishal Gondal, founder and CEO of GOQii.

Health insurers are also looking to test targeted disease management programmes under the sandbox. For example, ICICI Lombard General Insurance has got the approval for an app-monitored diabetes and cholesterol management wellness programme. The company will  reward customers who exhibit regular exercise and well-managed sugar, cholesterol, weight and hypertension levels, which are monitored through real-time health devices.

“Technology is going to bring major disruptions in the health insurance sector. It will increase customer connect, reducing operational costs while giving the insurance companies a lot of data to analyse and come out with better products,” says Sanjay Datta, chief underwriting claims, ICICI Lombard General Insurance.

According to Gondal of GOQii, in the same way that cash-backs revolutionised digital payments, such wellness incentives will revolutionise the health insurance sector in the next two to three years.

Watch Your Health is another insure-tech firm which has helped two companies  to get sandbox approval. According to Ratheesh Nair, CEO and founder of the company, the sandbox regulation has led to the proposed rollout of a host of tech-backed innovative products in the health insurance space. 

For example, one firm is offering to redeem points earned through activity against gym membership or diet consultation. There is also a proposal to provide customers with a personalised health coach, similar to the relationship manager in a bank. Some companies are proposing to reward customers with health monitoring devices like blood pressure and glucose monitoring machines, against a fitness regime.

Regulatory sandbox requires the rolling out of pilot programmes to a limited number of customers, from six months onwards. So if all goes well, the health insurance space could be chockful with incentives for a healthy lifestyle by next year.