Diffusion Of Innovation In Health Care - Innovating In Insurance Health Care

Diffusion Of Innovation In Health Care

Distribution Innovation - The emergence of real, online approval has been the major innovation in distribution in the Australian life insurance industry. Historically, Australians have bought the majority of their insurance as part of their mandated, retirement-savings plan, or for a small percentage of relatively wealthy Australians, via financial advisors. Recently, high quality, online coverage options are beginning to emerge, increasing the ease of access for ordinary Australians. This online approval functionality is also being rolled out to third-party intermediaries (such as financial planners) in the hope that it will increase sales of the product given the quick turnaround time for approval. ING Direct recently launched an online approved product allowing the customer to buy up to US$450,000 of coverage in 10 minutes.

Allianz have launched a similar product allowing coverage of up to US$1 million. This market is still young with great potential for growth. In particular, offshoring or outsourcing the underwriting and claims processing for these types of polities has the potential to yield significant cost savings.