The Referee, the Scorekeeper, and the Coach: Which Insurtech technology are You installing?

Greg Solomon,Managing Director, Head of Life & Health for Peak Re, Hong Kong

Greg Solomon,Managing Director, Head of Life & Health for Peak Re, Hong Kong

In the Insurtech space, start-ups are being created around a vast number of very different ideas—including blockchain, payment mechanisms, admin efficiency, policy consolidation, internet of things, gamification, etc. But in the life & health space specifically, a lot of innovation is centeredaround systems that measure & promote health.

And while some of these start-ups are gaining momentum, many are disappearing almost as soon as they appear. It has been said that many of these failed attempts were “solutions, looking for problems”—and on the basis of some of the startups that have reached out to me in the last couple of years for potential partnership, this feels like exactly the issue.

One of the biggest knowledge gaps lies in understanding the difference between medical underwriting, health assessment, and wellness promotion. And I also note that this misunderstanding exists on both sides of a partnership—the seller of the solution (often an Insurtech start-up) as well as the people who would be responsible for implementing the solution (the Insurance CIO, for example).

Let us consider each of these three ‘fields’ and discuss the key differences. The goal would be narrow the communication gap, and increase the chances that a valid solution gets matched with a real problem, for the benefit of policyholders, insurers, and innovators.

Medical Underwriting—the Referee

This is the process of assessing an applicant’s current health and future health risk, and determining (a) whether they should be allowed to buy this particular insurance product, and (b) if so, then on what terms. The focus on medical underwriting isn’t much on ‘calculating’ just how healthy a person is, in fact it’s more about trying to identify highly risky applicants and declining their cover (or at least loading their rates to reflect the higher risk). The vast majority of applicants are simply ‘accepted at standard rates’ (regardless of whether they’re super healthy or only slightly unhealthy).

As you can see, the system for underwriting these lives does not have to be capable of differentiating between mildly unhealthy, average health, super healthy—as long as it can ‘catch’ the riskiest of applicants.

Like a Referee, it’s all about making a decision– acceptable or not.

And this underwriting takes place only once—when the person applies for insurance. Regardless of how their health deteriorates after they get the cover, there is no impact on their premiums or available cover.

Health Assessment—the Scorekeeper

In some ways, this appears to be very similar to medical underwriting at its core. It is attempting to measure a person’s health using similar criteria (blood glucose, body mass index, blood pressure, cholesterol, and more)—the key difference is that instead of just trying to determine whether a person is simply ‘accept’ or ‘decline’ (for example), it is now trying to categorize a person into just how healthy they are, or might be.

To have a much more refined categorization of lives, these health systems often include additional information (sometimes to the exclusion of the base information)—and indeed, the nature of this additional information is often the distinguishing factor for a company.

For example, some companies like Prenetics offer genetic testing capabilities in partnership with insurers, determining not their current state of health (for example, whether a person has bad insulin resistance now), but whether they have a genetic predisposition to insulin resistance, for example. Other companies like Sikka Software have done extensive analytical work showing a strong relationship between a person’s dental health and their general health. Others, like Ōura Ring, might be built around a single wearable, using all the information that comes out of it (resting heart rate, heart rate variability, body temperature, movement, etc.) for measuring a person’s general level of health.

Like a Scorekeeper, this is all about objectively keeping track of the numbers without trying to decide what is good enough, nor encouraging you to do better.

In addition to the refined categorization that these companies offer—beyond just the standard accept/load/decline/defer categories of medical underwriting—anotherkey difference is that this information continues to be collected and measured over time, and not just once at application stage.

Wellness Promotion – the Coach

It always amazes me how many insurance companies are generally so passive about their policyholders after selling them a policy, they simply continue to collect the premium, waiting for the policyholder to get sick or die, without making any attempt to keep them healthy and thus delay or eliminate a future claim. I personally have several insurance policies of different types, and not one of these companies communicates with me around things I can do to manage my health.

In addition to some rather brute-force communication(like recommending to policyholders that they quit smoking)wellness systems use the information they collect about a person and make personalized recommendations with an aim to improve health. Your activity monitor, whether it’s Ōura or Fitbit or Apple Watch, can encourage you to exercise more each day, to spend less time without at least standing up and stretching, to get more sleep, etc.

And this is our Coach, looking at the numbers, seeing what can be improved, encouraging, and supporting that improvement.


There are very big differences between medical underwriting and wellness systems, and a number of the systems out there seem to get confused when trying to communicate their value to (re)insurance companies.

• Underwriting is basically about putting people into two main groups—‘accept’ (the vast majority of applicants) and ‘decline’ and that’s it. This is not to underestimate the science that goes into this determination, but it is not about calculating an actionable health rating for everyone.

• Underwriting takes measurements once, whereas wellness systems continue to take measurements over time.

• Underwriting is not about trying to make people healthier than when they begin, whereas that’s a key feature of wellness systems, usually through feedback loops or gamification.

There needs to be a lot more clarity from Insurtech wellness companies about where along the above scale they lie. Heart rate variability (HRV) is a very powerful measure when taken over time for determining a person’s general state of health, but as a single measure at underwriting stage, it is not that useful, and companies should be careful about selling it as part of an underwriting process when it is nothing of the sort.

Personal information

And it is really important that we briefly mention data privacy. Policyholders have shown themselves quite happy to share some information about themselves with insurance companies, like the Discovery/Vitality system and its many partnerships. Policyholders’ data on heart rate, activity levels, health food shopping habits, etc., all go through the system.  Genetic data, on the other hand, is very different. Here, partnerships between insurers and genetic testing companies are much more likely to keep the data separate. In this case, the genetic profile is not actually being used for medical underwriting (indeed in some countries this isn’t even allowed)—instead it is a service that the insurer arranges for the policyholder as a way of getting them to understand their genetic predispositions and high-risk conditions, and then manage their health in future taking this all into account. Of course there is a benefit to an insurance company of having healthy policyholders, but the delineation between underwriting and ongoing health maintenance is very explicit.

In conclusion, my person experience in having discussions with a number of companies in the Insurtech space has shown me that a lot of them are not clear about what value their company’s service would actually provide to a (re)insurer, and so they confuse underwriting with health assessment and with wellness promotion.

If the insurer is looking for a Coach, but the Insurtech company is actually a Scorekeeper (masquerading as a Coach) but being sold as if it were a Referee, well then … I just don’t know.

Sometimes it feels like workable partnerships are a lot closer than people realise, if only they’d speak the same language.

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