Why Are Insurance Companies Embracing IT?
A major way that insurers are becoming more nimble and cost-effective is by embracing Big Data, mobility, and the Cloud
Fact: The insurance industry is slow to innovate. The reason? There's really been no need to do so until very recently. For hundreds of years its business model has been very simple and most of the large firms relied on an army of independent agents to sell their products to the public.
Just as the Internet revolutionized retailing, it is making waves across the ever-traditional world of insurance. That's because companies both large and small, old and new, can reach the public directly through the Internet. If the right Information Technology powers direct consumer access, the result is a potent combination of efficiency and cost savings for otherwise staid companies.
Add to this scenario the fact that we're seeing the development and maturity of the Accountable Care Organization (ACO). In the technology sector, it's a given that when companies collaborate, they're more likely to learn from each other and innovate. This concept is not as obvious in the world of insurance. So when ACOs help facilitate collaboration between providers and payers, we're experiencing a more streamlined process of care that strives to preserve consumer choice.
Consumer choice is important in retail and insurance providers should take some pointers from that industry. That's because retailers are accustomed to operating on razor-thin margins and are discovering that cost-savings and a renewed focus on the consumer can improve those margins. It's no different with the insurance sector. With growing options for the consumer across all channels, it's a no-brainer for established insurance companies to pay more attention to their consumer base. For instance, certain insurance companies have sponsored their own 'storefront' clinics that provide fast, efficient healthcare on their terms. Patients with chronic conditions are finding these clinics to be extremely helpful given that they are essentially economical, one-stop treatment shops.
Did you know that the treatment of chronic conditions and diseases (such as heart disease, stroke, diabetes, arthritis, and cancer) account for more than 70 percent of healthcare expenses in the West? To be sure, the medical world is working feverishly towards eradicating as many of these conditions as possible. In the meantime, however, insurance companies can work with providers and consumers alike to devise new, affordable coverage models that are relevant to the 21st century.
A major way that insurers are becoming more nimble and cost-effective is by embracing Big Data, mobility, and the cloud. Again, this is an ultra-traditional industry that has always placed IT in a rarified silo. But times are changing. The savviest and most competitive insurance companies are learning how to integrate IT across their global operations in order to facilitate cost efficiencies and robust growth well into the future.