Publications

Tim Smith, Head of Protection at Hannover Re UK Life Branch, and Matjaž Petrovic, Vice President of Sales at GenePlanet, presented at Insurtech Insights 2024, Europe's largest insurtech conference. Their collaboration began with a pilot study in 2022, aiming to integrate genetic testing with health monitoring for life and health insurance. They have since pioneered preventative healthcare, demonstrating how genetics can shape insurance policies for mutual benefit.

The integration of genetic insights supports the natural alignment of interest between the insurer and the policyholder. Offering genetic testing to policyholders as a value-add benefit after they have purchased their cover enables affordable access to genuine health insights. This empowers customers to make informed decisions, regarding health and lifestyle changes or early healthcare interventions, ultimately contributing to reduced morbidity and mortality rates.

A member of the audience asked what approach insurers should take to avoid identifying cohorts of people who may become uninsurable due to genetic traits with high risks. In most markets, the results of genetic testing cannot be used for medical underwriting except in very specific circumstances. Indeed, the use of genetic information in underwriting in the UK is subject to regulations and ethical considerations to ensure fairness and protect individuals’ privacy and rights, according to the Association of British Insurers (ABI) code of practice on genetics. The integration of preventative genetic testing envisaged in the pilot does not change this but is provided to policyholders once the policy is inforce, with no recourse to adjust premiums in light of the results. The opportunity for the policyholder and the insurer is that genetic insights lead to health improvements in the long term.

The pilot conducted with Hannover Re UK Life Branch employees aimed to assess the effectiveness of preventative healthcare technology and its integration into insurance products. It also aimed to evaluate the engagement and usability of the platform and identify opportunities for innovation in insurance products, and the potential for improvements to health and ultimately a reduction in claims.

Unlike traditional genetic tests that focus on specific genes or regions, GenePlanet's solutions utilise Whole Genome Sequencing (WGS) to provide comprehensive insights into individuals' genetic predispositions across factors such as sports performance, nutrition, health, and disease risks. This technology served as a powerful tool for the pilot study and preventative healthcare overall, enabling personalised adjustments in diet, sleep, exercise, and health risks through lifestyle analysis. Additionally, the study utilised health scoring to track health status, expert consultations for personalised guidance, blood reports to monitor markers and their health significance, and health analysis for detecting potential disease risks.

Despite the pilot's artificial setting with Hannover Re employees, engagement exceeded expectations, with 90% favouring the recommendations. This resulted in noticeable lifestyle improvements, such as dietary and exercise changes, along with a greater inclination towards seeking medical advice. Notably, 98% recognised the potential of genetic testing to boost insurance sales, while nearly all participants agreed on its ability to retain customers within their insurers.

The pilot insights highlight the potential of genetic testing as a value-added proposition, capable of driving sales, improving customer satisfaction, and boosting retention rates when marketed effectively. If insurers articulate that they are utilising genetic data to support preventative healthcare and dispel any misconceptions regarding its misuse against customers, they can strengthen trust and ultimately, enhance overall policyholder health. This, in turn, minimises the need to claim, thus reducing insurance costs.

In today's evolving healthcare landscape, the insurance industry is shifting its role from risk mitigation to steering health engagement platforms, taking a holistic approach to customer care.

This shift was explored in a panel session "From Insurers to Carers: How Incumbents are Shifting Roles with Health Engagement Platforms," held at InsurTech Insights 2024, Europe's largest insurtech conference. The panel of industry experts, including our very own Lisa Balboa, Head of the Digital Business Accelerator Life & Health, explored the transformative capabilities digital health platforms can offer.

Overall, the conversation underscored a shift in how insurance is perceived – from a transactional and traditional model of risk coverage to a dynamic partnership centred around proactive health management. Central to this transformation is the value digital platforms bring, both to insurers and customers alike. These platforms facilitate new business opportunities, promote healthier lifestyles, and create sustained value for customers throughout their lifetime. More importantly, they can improve customer retention by catering to the health-conscious and even share rewards, such as health discounts and incentives based on wearable data. This proactive approach not only benefits individuals but also leads to reduced claims and improved risk management for insurers, helping to strengthen their position in an increasingly competitive market.

As the digital age reshapes consumer behaviours, insurers face growing pains in targeting a new generation of health-conscious, digitally savvy individuals. While the complexity of human behaviour, coupled with AI and behavioural science, presents challenges, preventative health remains a key opportunity. Targeting and personalisation are key strategies for navigating this changing landscape, offering tailored solutions, such as addressing mental health issues, and triaging customers to better manage mortality risk.

Addressing behavioural challenges in a competitive marketplace remains a hurdle. Market research ideals often diverge from actual behaviours, highlighting the importance of designing solutions aligned with customers' true concerns and realistic aspirations.

We often hear the term "lifespan" but perhaps we should shift our focus to "healthspan" – the measure of the quality of life enjoyed in good health – as expressed by Peter Ohnemus, founder and CEO of digital technology health platform Dacadoo.

Looking to the future, insurers must adapt to changing demographics and healthcare needs. This includes utilising passive health engagement platforms, integrating with healthcare systems, and addressing gaps in wellness and preventative healthcare services. Initiatives promoting personal health, like tobacco reduction programs, also extend to climate change benefits. Communicating a holistic view, particularly when it comes to planetary health, could be key to engaging with younger generations.

In the rapidly evolving landscape of increased digital sophistication, the strategic collaboration between Hannover Re and Fortiro has not only transformed claims assessment but also earned the prestigious "Global Development" award from Protection Review 2023. Protection Review, a leading authority on the UK's health and protection insurance industry, recognises global advancements made in life and health insurance. This new award category celebrated the collaborative efforts driven by the team at Hannover Life Re of Australasia Ltd (HLRA), acknowledging the transformative impact of Fortiro's technology on claims strategies and fraud mitigation. Tim Smith, Head of Protection at the Hannover Re UK Life branch represented the team at the Protection Review awards ceremony held at the Landmark Hotel in London on Wednesday 6 December 2023.

Traditional claims assessment processes often grapple with complexity and time constraints, making it challenging to detect fraudulent documents. Fortiro's innovative technology "Protect" addresses this issue head-on by automating the verification of financial documents, streamlining the claims assessment process, and helping to significantly reduce the risk of fraud.

In October 2022, HLRA conducted a proof of concept (POC) using Fortiro's technology on 84 historical claims documents. These documents were categorised into three groups: those with previously detected fraud, suspected but unproven fraud, and genuine claims. The results were remarkable – within just 30 seconds, Fortiro's technology identified suspicious flags in 13 documents, leading to the confirmation of three instances of fraud and potential alterations for three more claims. This translates to a potential annual saving of AUD 450,000, showcasing the efficiency and effectiveness of Fortiro's fraud detection technology.

Driven by the success of the POC, HLR Aus has implemented Fortiro's advanced fraud detection technology across their life insurance portfolio and has also demonstrated sufficient scale and applicability for cedant portfolios.

Sean Quagliani, CEO Fortiro reflected "Fortiro exists to prevent document fraud and friction, so we are excited to partner with Hannover Re. Insurance fraud is a global challenge, and with the proliferation of digital tools, fake documentation is easy to create and very difficult for assessors to recognise. The POC with HLRA has shown incredible potential for HLRA to protect the business, cedants and society from fraudsters, and to further streamline and digitise the underwriting and claims assessment processes."

The potential and opportunities with Fortiro continue to evolve, demonstrating success and efficiencies for other markets. HLRA envisions extending the use of fraud detection technology across the entire insurance value chain. This includes reviewing financial documents during the underwriting stage, increasing straight-through-processing rates, reducing customer touchpoints, and exploring further development to detect fraud in medical reports, death certificates, and identification documentation.

Hannover Re's successful integration of Fortiro's cutting-edge fraud detection technology has helped to safeguard their business from fraudsters whilst placing them at the forefront amid the evolving landscape of digital sophistication. The recognition from Protection Review underscores the positive impact of Fortiro's document authentication technology, "Protect," in enhancing fraud detection within the life insurance industry.

Amy Sworden, Head of Claims Operations, HLRA, reflected on this achievement, stating "Hannover Re are proud to be partnering with Fortiro to bring this technology to the life insurance industry, and to be raising awareness of the ever-increasing risk of fraud."

The integration of technology and health monitoring offers various options that unlock potential opportunities within the insurance value chain. This integration not only enables insurers to gain a better understanding of risks and enhance customer experiences but also empowers individuals to take charge of their health and well-being.

Monitoring health through wearable technology

Technology is making a significant impact through wearables, such as smartwatches and health-tracking rings.

"There's a wide range that's starting to be developed here. The wearable smartwatch is now going beyond steps and tracking things like the heart rate and blood oxygen" said Hannover Re's Lisa Balboa, who was discussing how the insurance industry leverages technology to better understand people's health and well-being on the Practical Protection podcast.

The expansion of these devices is especially valuable for the ageing population as they can also detect fall risks, alerting caregivers to potential issues and giving families peace of mind.

New devices like wearable patches are also emerging, which can replicate vital signs monitoring and transmit medical information to healthcare providers, potentially enabling patients to be discharged from hospital sooner as their vital signs can be monitored remotely from the comfort of their own homes. Ongoing research is assessing these medical devices for certification.

Transdermal optical imaging technology

An exciting alternative to wearing health monitoring devices is transdermal optical imaging technology which uses smartphone cameras to track health indicators, such as heart rate, blood flow, and potentially even blood pressure and blood glucose levels. Capturing a 30-second video selfie with this technology detects early health issues, enabling early diagnosis and intervention.

Genetic testing and predictive analytics

Another promising area in health and insurance is genetic testing. Insurers are partnering with companies to provide predictive genetic tests that help individuals understand their genetic risk factors for various health conditions. This information empowers individuals to make lifestyle changes or seek early medical intervention. For example, if someone is genetically predisposed to a certain type of cancer, they might undergo early screening or someone at high risk of cardiovascular disease might monitor their blood pressure more closely.

Data privacy and consent are vital in technological developments, especially when collecting genetic data; this data is protected and is not shared with insurance companies. Instead, insurers can promote this technology to empower customers to understand their health risks and take proactive steps to support their health and well-being.

With numerous technological developments in the health sector and their synergy with the insurance industry, this podcast provides a lot of thought-provoking and valuable learnings.

To find out more, you can contact lisa.balboa[at]hannover-re.com or listen to the full podcast episode here:

The latest developments in machine learning and AI potentially have a huge role to play all across the insurance value chain, from advice at point of sale to claims. Possible applications when purchasing a new insurance policy include making financial advice more readily accessible to consumers of all incomes, and helping customers evaluate the complexities of insurance contracts.

"Perhaps there's an opportunity to use AI to enable more people to have access to financial advice right across the socioeconomic pool," said Hannover Re’s Lisa Balboa, who was discussing digital trends in the life & health insurance industry on LCP's Insurance Uncut podcast.

There are also opportunities to use AI to support existing customers. For example, insurers could use data analytics to better understand customers' evolving needs. This might enable insurers to offer products that adapt to customers' changing financial and health protection needs throughout their lifetimes. In health management, predictive analytics could be used for more tailored disease prevention approaches. At the point of illness, the combination of analytics and new medical technologies could also be used to create more personalised treatment and recovery support pathways for diseases such as cancer.

Developments in wearables and genetic testing are beginning to make huge inroads into healthcare, and insurers are becoming increasingly aware of the benefits of these products. But how far should the insurance industry go in promoting these solutions? How can we work with established healthcare systems to ensure there is a balance between giving people insights into their own health and avoiding causing them unnecessary distress through early warnings around potential disease risks?

Lisa also highlighted that new consumer-facing AI technologies, such as ChatGPT, are still in their very early phases of development. When exploring opportunities to embed new technologies into insurance, it's important to be aware of the risks and limitations. For example, it's critical to ensure information provided is highly accurate, data protection principles are upheld and that the use of this technology is anchored around ethical AI principles.

Mental health is another area where insurers can make a difference, and as a volunteer with the Institute and Faculty of Actuaries, Lisa discussed the role the industry can play in further improving access to insurance for those affected by mental health conditions.

With many fascinating insights into technological innovations in preventative healthcare, genetic applications and generative AI, this podcast offers lots of food for thought. To find out more, you can contact lisa.balboa[at]hannover-re.com or listen to the full podcast episode here.

Protection gaps are a significant issue globally, with their severity and focus varying by region and local context. While many aspects are similar around the world, each market faces its own challenges. In the UK, protection insurance is mainly sold through financial advisers to middle and higher-income individuals, leaving a significant proportion of the population uninsured. This gap affects younger and less affluent families but also older individuals who could benefit from long-term care cover. Meanwhile, certain markets such as Japan have a growing protection gap among older lives due to an aging population. In parts of Latin America, Africa, and Southeast Asia there's an emerging opportunity to open up the Protection insurance market to the rising middle-income group.

Working towards closing these gaps and expanding the insurance market benefits society in numerous ways, including improved access to healthcare and a reduced burden on healthcare systems.

Technology-led developments such as wearables, smartphones, and electronic health records, as well as medical advances, create significant opportunities to develop products for underserved customer groups to better protect their financial futures. Exploring new solutions and partnerships is key to making a positive impact on society and growing the market for the benefit of all.

To find out more, you can contact tim.smith[at]hannover-re.com or lisa.balboa[at]hannover-re.com or listen to the full podcast episode here.

Similarly, wearable technology can be used like a dashboard to send people warning signals about potential personal health problems, said Hannover Re UK Life Branch's Tim Smith in a speech at InsurTech Ireland in January 2023.

Improving health and wellbeing is one of the UN's Sustainable Development Goals and life insurers have a key role to play in terms of facilitating and promoting good self-care. Through partnerships with organisations like LifeQ, Hannover Re can alert people to possible early indications of health problems. While most wearable products track basic fitness levels and prompt people to exercise, LifeQ, which specialises in biometrics and health information, has taken this model to the next level. Its technology can already pick up markers for 40 conditions, including respiratory, cardio and even some mental health conditions. Early detection and treatment of sleep apnoea, for example, can have a significant effect on mortality rates resulting from this insidious condition.

The potential for such innovations is huge. By embedding wearable technology into their products, insurers can encourage proactive healthy behaviour that is in everyone's interest. This can reduce the number or severity of claims, with the potential to drive cost savings for customers. Not only that but the data collected can have implications for rehabilitation processes and future product design. There is a natural alignment of interests between insurance companies and their customers in that the end goal of both is to enable long and healthy lives.

To find out more about these developments or to get access to the full recording of his presentation, contact tim.smith[at]hannover-re.com.