[The Future of Insurance in the Data Era] Insurers Tracking My Steps... The 'Data' Competition Heats Up

(Part 1) Expanding Healthcare by Collecting Health Data
Intense Development of Health Management Linked with IoT
Public Medical Data Use Opens Wide
Must Resolve Backlash Against "Information Collection Tyranny"

Editor's NoteWith the advent of the big data era, the insurance industry has also entered the era of customized insurance products. The emergence of new products and services based on customers' health and medical data is anticipated. The recent active utilization of data in the insurance industry shows two main trends: health data and financial data. The expansion of healthcare services enables the collection of health data and the development of products exclusively for the elderly and those with pre-existing conditions, as well as premium discounts, making it possible to utilize public data considering public convenience. Another axis is providing new financial data services based on MyData. It is analyzed that insurance companies in the data era will play the roles of both consumers and providers of data. Asia Economy examines the changes in daily life brought about by the convergence of insurance and data and addresses issues arising from data utilization through a planned series.

[Asia Economy Reporter Oh Hyung-gil] In 2018, Japan's Nihon Life introduced a diabetes prevention program in collaboration with Nihon Life Hospital and medical device company Omron. Just three years later, last year, when 99.1% of the approximately 1,000 participants showed improved average blood sugar levels, Nihon Life monetized the diabetes prevention service in July of the same year. For about 70,000 yen over three months, the hospital provides a 24-hour blood sugar monitoring device and an activity tracker via the Internet of Things (IoT), along with a simple blood test. A health counselor continuously monitors blood sugar trends and guides lifestyle habits. Nihon Life plans to secure 10,000 users of the diabetes prevention service within two years and expand the target diseases to include hypertension, aiming to develop it into a core business with one million subscribers.

Hana Insurance developed a health insurance product that calculates premiums based on the health grade of policyholders, offering up to a 40% premium discount to customers with good health. In collaboration with GHC (Grade Health Chain), which provides financial services based on health grades, it is possible to calculate health grades based on health checkup results and medical usage records. Customers with health grades from 1 to 4 can subscribe to a health-grade type insurance with up to 40% premium discounts, while those with grades 5 to 9 can subscribe to a standard product through underwriting. Health grades are reassessed every five years, and additional premium discounts are provided if the grade improves.

"Insurance companies are tracking my steps." As healthcare services emerge as a future growth sector, the global insurance industry, including Korea, is fiercely competing to collect health data. Beyond simply measuring step counts or providing exercise guidance like a health trainer, they are differentiating insurance and healthcare services by collecting lifestyle habits and medical usage records.

◆Data Changing Lives, Evolution of Insurance=Representative examples include Samsung Life's S-Walking and Samsung Fire & Marine Insurance's Anyfit, which provide points or gift certificates based on step counts. Shinhan Life operates 'Howfit,' a home training service based on artificial intelligence (AI) motion recognition technology. Efforts by insurance companies to collect and utilize customers' health data are expected to expand further.

This reflects insurance companies' interest in leveraging the spread of IoT-based wearable devices to conduct more detailed risk analysis and product development.

Based on clinical research analyzing the relationship between physical activity, nutrition, sleep, and health, it is expected that data collected by wearable devices can effectively stratify mortality risk and enable risk management such as disease occurrence through the formation of healthy lifestyle habits by consumers.

Especially, the opening of pathways to utilize public medical data is accelerating the data era in the insurance industry. In July, six insurance companies obtained final approval from the Health Insurance Review & Assessment Service (HIRA) to use public medical data, and recently, the insurance industry requested data usage from the National Health Insurance Service (NHIS).

With the possibility of utilizing data from both HIRA and NHIS, the insurance industry expects more sophisticated product development tailored to Koreans. It is anticipated that data covering disease occurrence, treatment progress, and nationwide health checkup data will be accessible. Based on objective data such as health age, premiums can be calculated rationally, increasing consumer benefits.

[Image source=Yonhap News]

◆Medical Community Opposition and Limitations of Free Service Perception=However, the medical community voices concerns that insurance companies' data collection could lead to abuse. There are claims that insurance companies might encourage enrollment for diseases with low probability while rejecting coverage for those with high probability.

Experts advise that insurance companies must overcome misunderstandings of pursuing private profits by supplying innovative health services that public institutions cannot provide, based on public data. Changing the perception that healthcare services are 'free' is also a challenge. The notion that these services are available at no cost as ancillary services of insurance companies could limit the development of healthcare.

Professor Hong Seok-cheol of Seoul National University said, "The distrust of insurance companies' use of public data stems from the prejudice that private insurance offers no benefits to the public and the suspicion that public medical data will be exploited solely for insurance companies' profits. Insurance companies must enhance their public interest and build trust that meets public expectations."