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BaoWan BetterCare The First Dynamic Pricing Insurance for Type 2 Diabetics

By Nadia Suttikulpanich, Head of Fuchsia Innovation Center, Muang Thai Life Assurance Public Company Limited

Nadia Suttikulpanich, Head of Fuchsia Innovation Center, Muang Thai Life Assurance Public Company Limited

1. The Project

It all started with a simple question: why can’t sick people buy health insurance while they are the ones who need it the most?

Chronic diseases have been growing over the years due to lifestyle and environmental changes. The future doesn’t look any brighter. According to the WHO, projections show that by 2020, almost 75 percent of all deaths will be related to chronic diseases. This will create a real problem by increasing financial burden on societies. However, we don’t have to go down that road because chronic diseases can be controlled. One of the most controllable chronic diseases is type 2 diabetes. Around the world, 415 million people have diabetes, 90 percent of them being type 2. By 2040, this number is expected to reach 642 million people. Such a growth is mainly due to bad eating and lifestyle habits. However, when properly managed, type 2 diabetics can live a longer and healthier life. Therefore, there is a real need to have efficient programs to help those people get in control of their disease.

Based on those insights we, Muang Thai Life Assurance PCL. (MTL) in partnership with Swiss Re, developed BaoWan BetterCare, the first ever dynamic pricing insurance for type 2 diabetics in Asia!

We made BaoWan BetterCare unique by building it for and with diabetic customers. We interviewed and discussed with different profiles of patients to understand the main customers’ pain points. Building on our customer understanding, we have identified the current offerings in Asia lack critical components to offer real support to diabetics. Most only offer severe stage coverage. While we also have this covered, we created a more relevant product by adding early stage coverage and OPD/IPD that can be used for any disease, even non-related to diabetes. However, we believe that a good control program is not only about cost support but also about becoming a real partner for these patients. To incentivise our customers, we have set-up a reward system by adjusting premium dynamically based on each customer’s real health status. We have also created a relevant ecosystem to help improve customers’ health.

"The future of insurance is all about personalisation in product and pricing through data"

First, we are committed to ensure our customers success. This is why we set-up a relevant incentive system. For an optimal control, diabetics need to visit their doctor every 3-6 months to follow-up on their HbA1C. HbA1C is one on the most important indicator in gauging health status for those patients. It is scientifically proven that every 1 percent drop in HbA1C can significantly reduce the risk of diabetes complications. We tied this important marker into our dynamic pricing which allows us to offer up to 49 percent discount on premium. To align with customer behaviour of doctor visit, the price is adjusted every 6 months. Convenience being a key consideration for MTL, all the process is done on our website (https://mtlbettercare.com).

Second, BaoWan BetterCare is more than just an insurance product. It is a holistic program that links-up relevant ecosystem partners to help customers get in control of their disease. Customers will receive one starter kit from Roche’s Accu-Chek for free. This is to encourage them to start with Self-Monitoring of Blood Glucose (SMBG). They will also have access to diabetes management application, developed by Prenetics, where they can track key health indicators such as glucose level, food quality, steps, and weight. Customers will also be able to chat with a certified dietician to understand how to change their diet in order to reach their goals. Last but not least, we also work with leading hospitals in Thailand (Theptarin Hospital, Bangkok Hospital, and Vejthani Hospital) to expand our reach and make sure the right patients get to know this innovative initiative.

2. The Early Results and Future

BaoWan BetterCare has been launched in April 2018. Besides all the positive feedback, what really matters to us is the extraordinary life stories from our customers. We recently met with KhunJiraporn, one of our early customers. After 5 months in the program, she reduced her HbA1C from 7.5 to 6.9, reducing her risk of developing complications, and therefore her premium dropped! Among all renewals, 75 percent of our customers decreased their HbA1C in the first 6 months of the program. To us, this is the biggest achievement.

Last but not least, this project is much more than just selling an insurance product. It is about tracking relevant health data, understanding the impact of behaviour change and control that it will ultimately result in risk reduction. All of this is done so that the insurance industry can expand relevant coverage to the right target customers. Diabetes is just one of many chronic diseases from which people suffer. This is only the beginning. The future of insurance is all about personalisation in product and pricing through data. We are shifting the insurance paradigm!

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