4 ways to boost long-term care insurance with IoT, AI
Growing longevity and falling birth rates across many parts of the world mean that elderly people (60 years and over) comprise a growing proportion of the population. Today, they account for about 12 percent of the total population, a figure expected to jump to 17 percent by 2050.
The costs of caring for the elderly are significant. Research by the Urban Institute and the Office of the Assistant Secretary for Planning and Evaluation, for example, shows that out-of-pocket costs average $140,000 for an older adult in the U.S. who has severe long-term care needs and uses paid care.
The next wave of technologies—powered by artificial intelligence (AI), cloud computing, the Internet of Things (IoT), wearables and blockchain (e.g. for medical files)— could offer some compelling answers to these challenges.
As key players in the senior care ecosystem, health and life insurers have the opportunity to use these technologies to enhance their offerings to older customers and drive higher levels of operational efficiency. Some examples of solutions might include:
- Motion sensors in the smart home could issue alerts when a senior has deviated from his or her usual routine.
- Security sensors to remind people of doors being closed, water leaks detected and the like.
- Wearable computers can help elders and their healthcare providers to track health indicators such as heart rate and activity levels. These could be paired with apps and telemedicine consultations, allowing seniors and their health providers to monitor and manage health conditions with fewer consultations in a doctor’s office. In addition, those devices can also help to stay in touch with their relatives and share photos, videos and the like.
- In the future, AI and robots might even provide physical assistance and psychological care to elderly people living on their own.
Insurance carriers can generate a range of benefits from encouraging elderly customers to adopt the technology. The key is to leverage customer data in a manner that shows the carrier can be trusted with personal information and to deliver clear incentives for customers for using the technology, whether these are premium discounts or value-added services.
Usage of smart home sensors and wearables can enable seniors to leave hospitals sooner after a medical intervention, so that they can recover in the familiarity of their own home. This may also help reduce the size of their claim. In addition, the technology could prolong the time an ageing person can live independently at home.
Closer monitoring of health indicators using wearables could help healthcare providers and seniors to pick up early warning signs for a condition such as heart failure or urinary tract infection. Not only could early intervention reduce the size of the potential claim, it may even save the policyholder’s life. Wearables could even alert users to take their medication or coach them about healthier living.
Carriers will be able to use the data from IoT sensors and wearables to make better decisions at an enterprise level, and to personalize services for customers by leveraging behavioral analytics. In so doing, they can position themselves as lifestyle partners to their customers and improve engagement with them by offering them relevant services and solutions. And once implemented they can quickly test and add new services to the overall proposition.
There is an opportunity for insurers, as a key stakeholder in the senior care ecosystem, to partner with healthcare providers, device makers, government and other parties to create customer-centered solutions for assisted living for the elderly. This is not merely an opportunity to improve commercial performance, but to play a role in addressing one of the largest social challenges of the future. They can do so either by creating their own new platforms and ecosystems or tapping into existing ones.
With the rapid advancement in IoT technologies and the benefits it offers insurers and customers alike, leveraging technology isn’t just an option going forward; It’s a natural progression. Insurers can gain a competitive advantage by finding the right partners and quickly bringing new offerings to the market, with customers benefiting from reduced premiums and innovative, customized solutions.