Health Insurance · Groupon

How to start a Groupon business for Health Insurance in emerging markets?

Jaiveer Singh VP, DBS Bank| FinTech Mentor | Connector | Innovator | Product Mgmt | Mobile & Digital Payments

October 25th, 2015

I was reflecting on high costs of health insurance premiums on perceived risks to individuals and how companies offer group insurance. Then I thought how about an online insurance program which provide group insurance with low insurance premiums to individuals while member do peer rating of risks to other group members based on their observation of their life style.

A group risk assessment by members and feedback by policy underwritter will allow a better deal for everyone.

I want to understand what could be first 2-3 steps to build a prototype around this idea.




Michael Burack

October 26th, 2015

I do not think that observation by peer groups would provide adequate information to an insurer for actuarializing premiums: especially in an emerging market... The latter tough to do even with empirically hard data, in a mature situation.... I could be wrong but do not think so...mb Michael Burack michaelbu@aol.com

Shobhit Verma

October 26th, 2015

The issues are mostly regulatory. It is illegal to shop around health insurance rates as an arbitrary group(for example hbs alumni).
There are good reasons for it and you can't change these regulations easily. 

Matthew Mellor CEO of Strenuus

October 26th, 2015

As a former actuary, I would agree with Michael's comments. Lifestyle is certainly a factor in predicting health costs, but not nearly as reliable as personal medical history, and family health history. I see two other issues:
1. Small group (under 50, where this would theoretically be more beneficial) can purchase PPACA plans, where medical underwriting is not required. Thus, having a system where healthier groups could find some other mechanism to seek lower premiums would create problems for the insurers' risk pool (i.e., high risk groups could get lower premiums by selecting a PPACA plan and low risk groups could do what you propose above).
2. Part of the effectiveness of medical underwriting is personal accountability. If you claimed something about your health status that was incorrect, it could invalidate your coverage. Since people are reviewing others, there's no mechanism for accountability.

Jaiveer Singh VP, DBS Bank| FinTech Mentor | Connector | Innovator | Product Mgmt | Mobile & Digital Payments

October 26th, 2015

Large Companies usually offer cash to promote employee wellness and subsidies in premiums based on last year claims however such a facility not available in large no. of small scale companies across many Asian countries.

Many Thanks for your comments.

Jaiveer Singh VP, DBS Bank| FinTech Mentor | Connector | Innovator | Product Mgmt | Mobile & Digital Payments

October 26th, 2015

1. Is it appropriate for low risks customers to seek low premium insurance with similiar profile people in their community (off course they bear personal responsibility of medical underwriting). This is indeed different from existing risks pooling approach 

2. Community feedback/ rating of individual declarations can provide additional data to assess group risks better. Wearable devices data once available can enhance this further like auto insurance companies putting data collection devices in cars to offer better deals for good drivers.
3. Personal data and peers feedback based deals can drive good health habits for people.

Still I agree local regulations need to be analysed to see legal feasibility.

Many Thanks for all your comments. Appreciate.

Matthew Mellor CEO of Strenuus

October 26th, 2015

Jaiveer, on question #1 above, it is, and it happens all the time. Every year, we "shop" the market to make sure we're getting the best deal. I think the issue has more to do with the insurer than the group. The availability / mandate of non-underwritten products means that most aren't underwriting at all--more of a community rating model than risk-pooled. When we shop the market, the lower prices generally are a function of:

1. Benefit design, and

2. Carriers getting aggressive to grow market share.

Have you considered the wellness angle for large employers?

Peter Liepmann

December 13th, 2016

Outside the US, there's generally better nationalized health care systems. It's also very much country by country. Where are you looking at? How can you copmpete w the gov.??