With decades of experience, what have been the most notable challenges facing the insurance industry?

The insurance industry has faced a multitude of challenges over the decades. One of the most notable challenges has been keeping up with advancements in technology and adapting to changes in customer behavior.

Macro Economics

Macroeconomic factors can significantly impact a carrier’s net investment income. This can include everything from interest rates and inflation to market volatility and geopolitical events. Insurers must be prepared to manage these risks and adjust their investment strategies accordingly, while still delivering value to their customers and maintaining a profitable business model. As macroeconomic conditions continue to fluctuate and evolve, the ability to manage risk and navigate uncertainty will be critical for insurers looking to succeed in the long term.

External Environment

The external environment presents a significant challenge for the US insurance industry, as it is subject to a wide range of unpredictable factors that can impact the availability of capital and the predictability of retirement assets. Over the years, I’ve witnessed significant changes in the insurance industry, particularly in response to external reinsurance events such as, natural disasters like hurricanes and earthquakes, and the 2007-2008 market crash. These events have had far-reaching effects on the industry, causing a shift in the stability and predictability of retirement assets and leading companies to restructure their investment portfolios to manage long-term liabilities. As the external environment continues to evolve and present new challenges, insurers must be prepared to adapt their strategies and offerings to remain competitive and meet the changing needs of their customers.

The Aging Population

Furthermore, as healthcare continues to advance, people are experiencing longer lifespans, leading to an aging society and an increase in the retirement age. Insurers must navigate a complex landscape of changing health needs, increased longevity, and shifting demographics. The demand for long-term care and retirement planning services is on the rise, putting pressure on insurers to offer comprehensive coverage that meets the needs of older Americans. Furthermore, as people age, they may become more susceptible to chronic health conditions that require ongoing care, ultimately contributing to the rising cost of healthcare. This trend has the potential to drive up costs for insurers, making it increasingly difficult to provide affordable coverage that meets the needs of an aging population. To remain competitive, insurers must adapt their offerings to address the unique challenges faced by older Americans while also controlling costs and managing risks associated with an aging customer base.

Finding out about CancerAid

I found out about CancerAid through my work as an Operating Partner in a company called Health Catalyst Capital. We predominantly focus investment efforts into companies enhancing the well-being of individuals by enhancing the efficacy and affordability of healthcare. This involves advancing the predictive analytics of healthcare outcomes and promoting value-based care. ‍ Our investment strategy places great emphasis on assessing the potential impact of technology in bringing about positive change. We give priority to companies that possess strong leadership qualities such as realism, effective communication skills, and a deep understanding of the needs and benefits of their user base. CancerAid being a prime example of this, whose team of Oncologists identified a problem in the care provided to cancer patients, which often focuses solely on clinical reactive treatment and overlooks holistic care. Their technology and communication platform aimed at filling this gap have demonstrated a significant improvement in the overall well-being of cancer patients. ‍ I found the opportunity presented by CancerAid to be captivating, particularly for the insurance industry. Additionally, I was intrigued by the idea that CancerAid could not only help patients navigate their recovery but also enhance the economics of the process, such as reducing the likelihood of comorbidities and expediting the return to work. ‍

‍The value driver for insurers

To cope with these challenges mentioned above, insurers typically resort to increasing their investment income or raising prices. However, any company that can alter the course of a claim by reducing the time individuals are away from work and increasing their motivation for self-care, could provide immense value to the insurance industry.

Trust

The public perception of trusting their insurers is unfortunately not very high, largely due to the challenging climate insurers operate in. However, CancerAid offers a unique opportunity for insurance companies to demonstrate their support to individuals as they navigate the challenges of a cancer diagnosis. This ability to offer support and care can significantly enhance the dynamic between insurers and their members and foster greater trust in the insurance industry.

Health outcomes

CancerAid provides an opportunity to increase holistic support for cancer patients, which can significantly reduce the risk of comorbidities such as depression. This, in turn, can improve the overall health outcomes for patients and enhance their quality of life. For insurers, this represents a valuable opportunity to invest in a service that not only provides tangible benefits for their members but also helps to mitigate long-term costs associated with comorbidities and other health complications.

Returning to work

The value of providing care and supporting a member to return to productivity is one of the strongest and most undervalued aspects in insurance. The longevity of claims is a significant concern for insurers, but CancerAid’s sensitive approach can reduce the duration of claims, enhancing the return to work rates. For insurers this means lowering the reserves that need to be allocated.