Insurtech – The insurance sector and HR go a long way back – the current system of employer-sponsored health insurance in the U.S. started in the late ‘20s when an official at Baylor University Hospital in Dallas noticed that Americans were spending more on cosmetics than on healthcare. The Baylor Hospital then came up with a new strategy that laid the foundation of employer-sponsored insurance. The hospital offered a deal to a group of public-school teachers in Dallas, where they could pay for healthcare the same way the paid for cosmetics – a little every month. They offered a plan for teachers to pay 50 cents every month towards hospital visits. Subsequently, the Great Depression and the two World Wars institutionalized employee-sponsored healthcare throughout America.
Back to 2019 – health insurance today costs exponentially more than a lipstick, and employers have taken note. While employers cannot do away with health insurance, they are looking to “optimize” and “streamline” their health insurance offerings to contain costs. Can insurtech help employers rationalize their insurance expense and turn health insurance into a competitive benefits offering?
What is Insurtech?
Insurtech is defined as the technology behind the creation, distribution, and administration of insurance. A portmanteau of the words “insurance” and “technology,” insurtech includes every digital touchpoint in insurance. Mobile apps, smart wearables, claims processing solutions, and policy handling tools are all insurtech.
Insurtech did for the insurance industry what HR tech did for HR. Insurtech helped insurance companies become more customer-centric, streamline claims processing, and deliver more personalized insurance recommendations. Essentially, insurtech is making the insurance industry more data-driven and objective.
So, how can it help employers attract and retain top talent while containing costs?
How Can Insurtech Help Employers Attract Talent?
The health insurance sector is not known for delivering great consumer experiences (think: mountains of paperwork). Health insurance is complex and a key use case of technology in employer-sponsored healthcare is its ability to simplify health insurance for end users, i.e., employees. Simplifying the health insurance system and making it easier to navigate is becoming imperative for health insurers as they face the threat of customer churn from newer digital players. According to an Accenture survey, more than half of the respondents failed a healthcare literacy test that Accenture gave them. They didn’t know what commonly used insurance terms like co-insurance or deductibles meant.
This article originally appeared on hrtechnologist.com To read the full article, click here.
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