Just released: How to raise venture capital in 2023


Humans, AI, and the Future of Health Insurance


Key Takeaways

Carl Niedbala - Founder Shield
Carl Niedbala

COO & Co-Founder

Via our FS Health VP of Sales, Will Treichler, and originally posted on LinkedIn here.

At the end of the day, yes, I agree with Choon Yan (@battlechoon) that the role of the insurance agents of all stripes will be dramatically changed by IoT device-fed AI that assesses and accurately prices risk in real-time.  With transparent pricing like that it will be less valuable to have a human in the middle showing costs to clients.  Just like in the financial markets technology will take over in price dissemination.  However, just like the financial markets, consumers will still need expert advice to make sense of the data.

Looking through the lens of the health insurance broker, the role of broker as price engine will likely become commoditized.  However, trends in the individual and group health insurance markets have shown the lasting value of expert brokers as both educators and guides.

As Steven Brill (@StevenBrill) points out in America’s Bitter Pill, a stated goal of the Affordable Care Act (ACA) was to build a platform that allowed consumers to shop for plans on their own.   Interestingly, the ACA actually increased the need for insurance agents (called “guides” in ACA parlance).  New consumers into the insurance markets (some because they could now afford coverage, others because they were forced into the market by threat of fines) who didn’t understand their myriad options and relied on the opinions of experts.

From my perspective as a B2B insurance agent placing employer groups into plans, that function is even more unlikely to be replaced in the near term in the group market.  A group as small as 10 employees will inevitably have 10 different healthcare stories for which an employer must find a single solution to offer to everyone from the thousands of potential combinations of plan designs, carriers, savings accounts, etc.

many of the most public problems seen in the health insurance tech industry have directly correlated to lack of insurance expertise within the tech-driven brokerages.

It’s a tall ask of HR/People Ops departments and finance teams to make those choices without the help of a bona fide expert even with accurate data feeds from insurance carriers, Fitbits, and quasi-automated platforms (e.g. Zenefits, Gusto, Namely). In fact, many of the most public problems seen in the health insurance tech industry have directly correlated to lack of insurance expertise within the tech-driven brokerages.

Ultimately, I think the insurance industry will follow the Paypal security model, meaning humans and machines will augment rather than replace each other.  Technologies like fitness trackers and biometric monitors will integrate with automated platforms to take much of the drudgery and paperwork out of the system.  However, that system will still need to be managed by industry experts to help individuals and groups find the most appropriate coverage for the best price.

No doubt the insurance landscape is changing and catching up with other modernized industries.  Drawing from the recent trends, the future will continue to rely on the intersection of expert advice and ever-improving technological innovations.

To learn more, you can always reach out to a member of our team by emailing info@foundershield.com at any time. Or create an account here in order to get a quote for a comprehensive program that protects your business!

Related Articles

September 28 • Health & Benefits

Choosing the Right Employee Health Plans

Choosing the right employee health plan for a small business or mid-market company is no small task — but we share some tips to help this process feel more seamless.

leave your peo
April 27 • Health & BenefitsRisk Management

Time to Leave Your PEO? How to Transition Smoothly

Mid-market and late-stage companies often outgrow their PEOs. If you’ve thought about saying goodbye to yours, here are a few factors to consider first.

medical underwriting
March 20 • Health & Benefits

How to save money on your group health insurance

Have you ever wondered how you can save money on your group health insurance plan? Ever wanted to find a way around paying those high premiums and save your company money? Well, Igloo Health is here to guide you through the process of medical underwriting in the current marketplace.

What is a BOR
December 20 • Health & Benefits

What is a BOR?

What is a BOR? It’s your “Broker Of Record.” This is an insurance industry term that many people don’t know about, but it could be the most important thing to learn as a business owner. Understanding what a BOR does (and what they can’t do) can give you peace of mind. Have you ever been promised

choosing health plans
September 28 • Health & Benefits

Choosing health plans: how lower premiums might mean higher costs

What if we told you that the price you pay for your monthly premiums wasn’t the most important thing to pay attention to when choosing health plans? That might sound a little crazy but the reality is that there are critical factors to look into besides premium. Ever wonder why you were stuck with a

health and benefits broker
September 7 • Health & BenefitsRisk Management

What we do that your health and benefits broker probably doesn’t

A lot of people will tell you how happy they are with their current health and benefits broker and rave about how fantastic of a job they’re doing. Still the question remains: “is he really doing the best job he possibly can?” These same people will claim how their broker is the nicest guy in