The global digital health and wellness market is at a point of inflection. In a world still struggling to cope with the impact of the pandemic, consumers and health providers are now much more receptive to digital service provision.
What’s more, public health systems are eager to embrace the cost and efficiency gains it promises; and industry players are keen to make the most of the opportunities.
But fresh capital, new technology and above all, improved risk management, will be essential if the sector is to meet expectations, according to recent research into the sector with 370 industry leaders undertaken by Beazley.
Growth is rapid
Some 90% of digital health and wellness businesses report they expect to grow this year and 58% say they have experienced an increase in demand directly due to Covid-19 and its impact on consumer behaviour, according to the research. Against this backdrop, in Asia Pacific, visits to Singapore’s MyDoc platform alone rose more than 160% since the beginning of 2020 with other regions reporting similar high take-up.
But if the industry is to thrive, it will require better support from its insurance partners. In Singapore and Hong Kong, 78% of businesses acknowledge that they operate in a moderate to high risk environment and just over two thirds (67%) say they have cover for only one or two key risks.
This pattern is consistent with the global picture, where lack of cover for existential risks is striking.
Risks abound
In Asia almost two thirds (64%) of businesses have no cover for loss of personal medical data, 75% have no cover for system failure or hack resulting in bodily injury and 76% have no cover for medical malpractice due to remote care provision.
But despite high levels of risk awareness, and a desire by a quarter of Asian-headquartered health and wellness businesses to establish more robust risk management and insurance frameworks, a troublingly high proportion of business leaders find engagement with the insurance industry problematic. Over a third (35%) struggle to read and understand insurance policies and a third (33%) find it hard to find cover that is right for their specialist business.
One of the reasons why insurance penetration is so poor, even though industry leaders feel that they know the risks they face and are confident they understand the insurance cover they need, is the sheer complexity of risk in this industry.
Healthcare and lifestyle professionals are well-versed in medical malpractice, bodily injury and professional liability exposures. However, many are unaware of the risks that arise when they move their business online, such as data privacy and protection, cyber risk, technology product liability and media liability risks.
Technology business leaders typically understand cyber and data breach liabilities and product liability, but they may not be aware of the bodily injury, medical malpractice, professional liability risks they may face if the technology fails or malfunctions, or if a cyber breach occurs.
Insurers need to step up
We know from this research that the digital health industry recognises it needs better leadership if it is to manage the full risk picture more effectively – but it also demonstrates that the insurance industry has a significant job to do in order to support the digital health and wellness industry more effectively.
Specifically, we need to improve communication, knowledge transfer and collaboration in order to deliver more appropriate cover, more effectively, to meet fast-changing customer needs.
We anticipate the market for digital health services will increase as users get more comfortable with new offerings, more applications are developed and the trend toward greater patient autonomy gains pace.
As an industry, our role will be to educate the market about the unique range of complex, interconnected risks it faces, not just around diagnosis, treatment and care, but also technology, data privacy and compliance and to provide effective, integrated solutions that combine medical malpractice, product liability, cyber and technology E&O with bodily injury protection.
This article is written by Singapore-based Dindson Phua, a virtual care underwriter at Beazley.
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Dindson Phua, Beazley
Digital health sector needs better support
Dindson Phua, Beazley