How Digital KYC Is Redefining The Health Insurance Industry
Global health insurance industry is undergoing a rapid digital transformation leading to a new wave of offerings. The past couple of years have radically altered the way businesses operate and provide service to their customers. Owing to the pandemic, healthcare and health insurance industries have taken the centre stage worldwide, and there has been a huge paradigm shift from traditional operating models to online mode of service delivery. With a steep spike in investments (about US$ 51 billion in 2021, per MoneyWeek) in health-technology start-ups, the digital health insurance industry is poised for a quantum leap. Amidst the growth trajectory, the health insurance industry is also confronted with challenges posed by frauds, competition and regulations.
Conservative estimate by The National Heath Care Anti-Fraud Association pegs the cost of healthcare fraud at about US$ 68 billion annually. Some of the most common frauds perpetuated in the health insurance industry are:
- False-charging for services not required or not rendered; misrepresentation of treatments
- Providing incorrect information regarding the applicant like pre-existing conditions, employment status etc. to fraudulently gain eligibility for buying the policy and obtain extra benefits
- Faking illness or even staging accidents to make illegal claim of the policy proceeds
- Identity frauds wherein fraudsters misuse harvested identities to purchase insurance and then claim for death / illness benefits; Identity thefts also lead to using a genuine policyholder’s credentials for availing healthcare and other medical benefits
- Forgery or falsification of policy documents
Fraudsters take advantage of lack of / ineffective identity verification process and interoperability to commit health insurance frauds, resulting in an increased strain on the already overwhelmed health care systems, apart from causing huge financial losses. Thankfully, technologies like Artificial Intelligence and Machine Learning have revolutionized the industry landscape. A lot of positive disruptions like digital on-boarding, electronic KYC, tele-consultation, mobility solutions, patient data interoperability and an uptick in the usage of Robotic Process automation (RPA) have shaped up the health care and health insurance sectors in the recent past. Key amongst these is establishing the identity of the customer – to establish they are in fact who they claim they are, and enabling their seamless on-boarding on to the business platform.
A robust identity verification system, apart from weeding out fraudulence, enables providing medical care, prescription and health insurance services online, without the need for any onsite visits or in-person interactions. Platforms like Digid offer effective on-boarding and identity verification services catering to end-to-end digital customer journeys in the health insurance space. Key winning features of Digid include:
- Omni-Channel offering to customers to provide seamless services through any digital medium of their choice and at a place / time of their convenience
- Configuration-driven set-ups and controls offering maximum flexibility to service providers and their customers; customization features to cater to unique needs of businesses
- Digital on-boarding and identity verification suite that provides end-to-end capabilities covering all possible user journeys that include:
- Faster and accurate verification of identities leading to a reduction in on-boarding time, costs and increased conversion rates
- Fraud prevention by leveraging on cutting-edge technologies, leading to increased compliance with regulations and reducing losses
Health insurance industry is one of the fast growing sectors and according to the market research firm IMARC, the global health insurance market was valued at US$ 1590 billion in 2021 and is set to register a CAGR of 7.2% to reach US$ 2426.6 billion by the year 2027. There is a tectonic shift in the way insurance services are rendered and consumed worldwide. The traditional business models warranted in-person interactions, collection / verification of physical documents and were prone to identity frauds. Also, owing to the silo operating models, the identity verification process was fragmented and repetitive, causing massive dropouts during the on-boarding stage. With the advent of the digital era, online / remote mode of interactions and electronic service delivery is here to stay. Customers are becoming increasingly conscious of data security and want their insurance service providers to ensure that their digital identities and personal / health information are well insulated from frauds and scams.
The thrust is hence on improving customer experience and offering them secure solutions for all their health insurance needs. The priority for these new age insurance providers is to embrace technology platforms like Digid in order to ride the digital wave. Improved automation in the areas of on-boarding and KYC will lead to better product offerings, servicing of the policies, effective use of data for customisation of services and prevention of frauds. Welcoming you to partner with us to offer best-of-the-breed digital experience to your customers!