Insurance Business Needs The Right Planning
Insurance Business Needs The Right Planning

It is known that companies seeking sustainability offer benefits to their employees, the most prominent of which are social protection and health insurance, and governments offer their employees various insurance benefits, including health and life insurance, and individuals themselves and self-employed people can make an insurance subscription for themselves through various insurance companies. Although insurance companies make a lot of profits, the losses may be huge if there is no risk management capable of setting rational policies to preserve profits. Here are several tips to improve your insurance company.

Insurance companies are an important major player, connecting consumers (patients) and service providers (medical institutions).

Insurance companies are well motivated to protect the interests of their customers through various insurance plans, including sickness and life insurance, as well as other types of insurance such as car insurance, business insurance, and home insurance.

But what if the insured customers had accidents that required the intervention of your company and the disbursement of expensive insurance money and expenses?

How can insurance companies provide a distinguished insurance service that customers feel while at the same time reducing costs and expenses?

The ideal solution is to rely on digital healthcare technology because insurance companies need to reduce their medical bills to increase their profits. Thus the digital healthcare model is the best solution to reduce costs. We will explain this in detail, but first let's get acquainted with this innovative trend in dealing with the reduction of insurance expenses. Especially in countries like the United States, where medical costs are high and private insurance plays a big role.

How can digital healthcare reduce insurance costs for insurers?

In short, the solution is to encourage customers to lead a healthy life that reduces disease, increases productivity, reduces mortality and contributes to making people's lives longer.

An illustrative example is Vitality insurance, which measures how much you exercise with a wearable device like Fitbit and gives customers insurance points that add up to calculate a premium.

On the other hand, in South Korea, where public health insurance accounts for a large proportion and medical regulations are strict, it is as difficult for private insurance companies to introduce new technologies as it is in the United States. However, insurance companies in South Korea have begun to introduce digital health technologies to reduce costs as it has become a global trend that also spread to Egypt, Saudi Arabia, UAE and Qatar, where emerging markets are a fertile environment for innovation in various fields including the insurance sector.

Insurance companies receive premiums, manage them, and pay for the medical expenses incurred by the insured. Therefore, the higher the premium management profit and the lower the medical expenses, the higher the profit. With the trend to raise interest rates around the world after the war in Russia and Ukraine, there has become a need to reduce expenses on insurance companies, as the high interest rate does not mean a decrease in medical expenses, as high interest rates are linked to the overall rise in energy prices and prices in everything even medical services This means that raising the interest on subscribers in insurance services will not compensate for the amount of expenses that are growing rapidly such as old age.

More and more insurance companies are paying attention to ways to reduce medical expenses. This can roughly be divided into two categories. One is to prevent the occurrence of disease, and the other is to treat the disease that has already occurred as efficiently as possible.

Many insurance companies are trying to take advantage of the rapidly evolving digital healthcare in order to ultimately reduce medical expenses through disease prevention or effective treatment.

It is known that the prevention of diseases is more effective and better than treatment, which inevitably leads to expenses and expenses for insurance companies and a rise in the cost of treating the disease after it occurs. Therefore, health programs are important for insurance companies to prevent illness before it occurs.

In the United States, policy holders had easy access to health facilities, such as fitness clubs, and to benefit from subsidized immunizations and smoking cessation programs.

The most popular digital health program is the Vitality programme, which is run by Discovery, a South African insurance company. This program pays points for various health-promoting actions, including health checks, and provides discounts on the purchase of healthy foods or health-related products for each membership level determined according to the points earned. In addition, the key is to motivate subscribers to lead a healthy lifestyle by providing benefits such as free juices and watching movies.

Imagine that your company launched an application that encourages subscribers to exercise, subscribers will get discounts or free movies, for example, on platforms such as Netflix, AMC, Shahid platform, and so on.

Learning about health-promoting behaviors also includes purchasing and using fitness products, as well as activities such as attending the gym, golf, or running competitions.
Insurance companies can also offer wearable devices or health-related applications that belong to digital healthcare. To monitor the participants' health performance and encourage them to practice a healthy lifestyle.

After the success of Vitality, many insurance companies started taking interest in rewards-based health programs. For example, Anthem, America's largest insurance company, operates a health program called Anthem Health Rewards that rewards health-related activities.

With the recent development of digital healthcare equipment, and digital products such as the Samsung smartwatch and the Apple smartwatch, there are various attempts to induce and monitor the healthy behavior of subscribers easily.

Vitality developed an insurance product jointly with John Hancock, an American life insurance company, and began providing subscribers with the Fitbit app, a synonym for activity meter, for free. Subscribers can get Fitbit after undergoing a simple health check. Like Vitality, they get points according to the amount of exercise, health check, and smoking cessation. Each year, the subscriber's score is determined by points, and the premium is calculated on the basis of this score.
According to the company, subscribers who lead a healthy lifestyle can save up to 25% in insurance premiums compared to those who lead an unhealthy lifestyle.

John Hancock operates outside the US under the name Manulife and, since August 2015, has independently launched a similar program in Hong Kong. It is a program called Manulife Move, which provides wearable devices to subscribers who wish to, and if the subscriber walks more than a certain number of steps per day on average, premiums are deducted according to the grade. If you walk an average of 5,000 steps each day, you get a 5% discount, and if you walk 10,000 steps or more, the discount rate goes up to 10%. Oscar Health, an American startup insurance company, provides various services such as telemedicine to the younger generation through a mobile app. Upon reaching the target number of steps, the program returned up to $20 per month as an gift certificate, at a rate of $1 per day. The target number of steps is between 2,000 and just over 10,000 steps per day for each individual, and varies depending on how dedicated the user is to achieving the goal.

In addition, UnitedHealthcare, the largest insurer in the United States, pays subscribers with an activity meter called Trio Motion and, depending on how many steps they take, up to $1,460 per year in their health reimbursement account. Announcing the start of the deposit program. The program evaluates three indicators: activity frequency (at least 6 activities lasting at least 5 minutes per week), activity intensity (3,000 steps in 30 minutes), and activity duration (10,000 steps per day).

Let's summarize the corporate programs we've known so far. While companies like Vitality and United Healthcare want to integrate and manage different indicators, John Hancock, Manulife and Oscar Health focus on one step, so they have a relatively simple structure. Given that it is not easy for consumers to continue with healthy behaviour, it can be seen that the possibility of achieving this is increased by presenting a clear goal. It also appears that the burden of tracking the various indicators has had an effect. However, in the case of Vitality, while the program has been operating for more than 20 years, it must have gained enough experience in terms of excellent discounts and health-boosting benefits for subscribers. There is a high probability that the benefits are commensurate with the improvement of health from subscribers that may not be provided in the event of a deficiency in As we shall see later, those latecomers are more likely to have a stronger marketing objective to attract subscribers rather than reduce insurance loss rates by improving the health of subscribers.

Since the end of last year, similar programs have appeared in South Korea. Jikto, which makes wearable devices that correct gait, has partnered with Kyobo Life Planet, an online subsidiary of Kyobo Life. The partnership aims to bring about healthy lifestyles for the participants.

The company recently announced a program to purchase insurance for Jikto users to cover traffic injuries during commuting hours. Unlike most collaborations between digital healthcare and insurance companies that focus on healthcare for insured people, Jikto is significant in that it has created a new business model that provides insurance to users of digital healthcare devices.

In addition, foreign insurance company MetLife has started a program that distributes products to policyholders along with Allianz Life, allowing the general public to use the Noom app to manage their health.


From the subscriber's point of view, the better for him, the more active he is, the better for his health. At the same time, insurance premiums for it are reduced. This is an ideal win-win model through which insurance companies can reduce expenses and double the profit while decreasing the value of the insurance subscription for customers.