Using insurance and employee benefits to improve risk management and patient outcomes.

Can multinationals help ‘insure’ a better world?

For employee benefits providers and private healthcare companies, accessing new markets has traditionally been based on a ‘push model’, ie, lobbying governments in developing and emerging markets to provide access to multi-national companies based in or with offices in the country. Now, the tables are beginning to turn. Governments and domestic regulators are increasingly welcoming an influx of private providers amid is a growing realisation that these providers can help improve risk management, standardise services and increase access to improved wellness and healthcare provision.

As the World Health Organisation highlights, health outcomes are highly responsive to healthcare investments. Governments are increasingly recognising that allowing access to private healthcare can reduce the burden on the state and leads to higher overall investment in preventative wellness solutions as well as healthcare treatments – all of which offers massive societal benefits.

Governments are opening markets also because they believe local organisations can learn from the big multinational institutions and in some cases because they believe existing local providers’ risk appetites can pose a problem.

This is clear in China where the insurance industry is expected to be a major beneficiary of the leadership’s recent announcement to lift the cap on foreign ownership in financial firms. Eunice Tan, an analyst at Standard & Poor’s Global Ratings highlighted: “The Chinese insurance sector’s risk management remains in the developing stage, and thus would benefit from a greater influx of overseas practices and professional personnel1.” There is a belief that the multinational’s ability to effectively manage risk will moderate local market companies’ appetites for high-yield, short-term life insurance and other investment products.

There can be a tension between ‘big business’ and local market operators when it comes to competition, but increasingly, across the globe, we see freer market access resulting in a rise in standards. Indeed, as EY highlights in Africa: “The growing presence of international insurers is positive for the region as it tends to bring in relevant expertise, … driving healthy growth and competition in the market.”

It’s important to remember however, that this process is not, by any means, a one-way street. Larger multinational operators can often learn from the agility and innovation of smaller local players. We often see multinationals seeking to work with local partners who understand the ins and outs of a particular country’s regulatory and welfare provision systems and both parties can benefit from such knowledge sharing.

“If you care about the NHS, you should pay for private healthcare.”

Are these developments good for local infrastructure?

The desire of global insurers to integrate blockchain technology – the transparent and responsive management of transactions in a digital format – as a fixture of the industry infrastructure will also have a positive outcome for emerging markets. The introduction of smart contract systems will reduce the requirement for documentation and manual checks allowing for much faster settlement – helping both the insured and the insurer.

A contract would first be recorded and verified on the blockchain, which would then ensure that only valid healthcare or benefits claims are paid. Once the specified criteria are met, the blockchain would trigger automatic payment of the claims without human intervention, significantly increasing the speed of resolving a claim.

Economies opening to global players in future will benefit from access to the latest technology infrastructure, avoiding the teething problems and software issues that have been problematic for many providers in more developed economies, where they have struggled with using endless quick fixes and patches to keep their systems running.

Blockchain will improve the experience of individual employees travelling or working around the globe in another way too – they will also be able to track who is accessing their personal data with verification registered on the blockchain. For sensitive data such as a person’s health records, it will be possible to verify data and securely forward it to relevant treatment facilities and employers’ insurers.

Looking to the future

Regulators increasingly recognise how best practice operational models adopted by global insurers and employee benefits providers can improve local market standards. The advantages are also being felt at a macro level through more stringent risk management procedures. At a micro level, patient outcomes are improved because insurers invest in local medical facilities, which reduces the cost of moving patients to other countries for treatment. Cost remains the biggest health care issue facing most countries, but the introduction of globalised healthcare solutions and an increasing switch in the burden from state provision to privately funded solutions can benefit the most vulnerable in society.