SPOTLIGHT ON DIGITAL HEALTH
Why is insurance a difficult conversation for digital health and wellness leaders?
Globally, digital health and wellness is a new, economically and socially significant industry, led by people from diverse backgrounds – medical, healthcare management, technology, lifestyle, wellness and financial. Some are young entrepreneurs, others are seasoned health or technology veterans.Telemedicine’s rapid expansion is a challenge for insurers
Over a third (36%) of digital health business leaders globally struggle to find insurance that is right for their specialist business.
One third have difficulty knowing what types of risk they need to be covered for.
Perhaps most challenging of all for insurance leaders, 30% of digital health executives think the hardest thing about buying insurance is reading and understanding the policies.
But given the variety in the skills and backgrounds of industry leaders, and the diversity of businesses within the sector, it is perhaps unsurprising that there is also huge variation in terms of how business leaders understand and buy insurance.
Regional variations are striking
In Asia (Hong Kong and Singapore), over a third (35%) of digital health executives struggle to understand insurance policies and 33% worry about finding appropriate cover. In Spain, likewise, concerns center on finding the right insurance (36%) and reading and understanding policies (33%).
By contrast, in markets where specialist insurance cover has a longer history, very few UK and US digital health leaders report difficulty reading and understanding insurance policies. Instead, their top concern is knowing the types of risk they need to be covered for, cited by 43% in the UK and 40% in the US. This is likely to be a particular concern for businesses that are expanding fast into new geographic territories or new areas of business.
US business leaders are also particularly worried over whether claims will be paid. Almost one third (31%) cite this concern, seven percentage points higher than the global average.
Canada also produces an unusual finding. Uniquely among the territories we surveyed, knowing the values (insurance limits) they needed to be insured for was the top concern, cited by 40% of respondents – despite this group of leaders having operated in the sector for longer than those in any other territory we surveyed.
Pressures are unique
These findings suggest that industry leaders face a unique set of pressures. They are at the forefront of product, service and technology innovation, grappling with the challenge of managing and mitigating emerging risks; but also operating in a highly regulated space and where regulations can vary both at the state and the country level. Compounding the issue, in some instances, government requirements can be very rigid.
This may explain the higher levels of concern in some territories and particularly among established (larger) players in finding insurance that is right for their business, cited by 45% of respondents.
Wide-reaching coverage is most valued
Globally, being covered for every situation is the most important factor guiding insurance purchasing, rather than any desire for long term partnership or support. Factors like insurer reputation, financial stability and even meeting regulatory requirements are considered comparatively less important. Conversely of course, developing those long-term insurer-client relationships might help in terms of improving risk management insight, innovating better tailored coverages and delivering enhanced support as the business grows.
One size does not fit all
It is not possible to provide cover for any business ‘for every situation’. But it certainly is possible to design policies for different types of businesses and to ensure that policy documentation and wordings are easier to understand.
We have produced a video that helps address some of these concerns: