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  • September 2020
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10 Steps to Launching a Digital Insurance Product

Diabetes product in Mexico reveals success factors for bringing innovative digital platforms to market

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In Brief
Digital transformation remains new territory for insurers in Mexico, but new product innovation introduced this year may be changing that – while also addressing a critical coverage need for an underserved population.

Ask any industry executive in the midst of structuring such a solution and you will quickly learn the many business aspects involved, spanning the insurance value chain and impacting areas throughout the organization. In Mexico, digital transformation remains new territory for insurers, but an innovative new product introduced this year may be changing that – while also addressing a critical coverage need for an underserved population.     

Diabetes Coverage Goes Digital: Meet Amae

Mexico has one of the highest rates of death attributable to diabetes and a correspondingly high measure of disability-adjusted life years. According to government data from 2018, 10.3% of the population aged 20 or older has diabetes, up from 9.2% six years earlier. Mexico ranks second behind only the U.S. in obesity, which is closely linked to diabetes, with 30% of the population obese and a 65% of the population overweight. Current trends point to Mexico’s diabetes epidemic worsening in the years ahead.

Despite this national health crisis, life and health insurance targeted to people with diabetes remains lacking. Whereas other markets have succeeded in expanding coverage to diabetics through innovative offerings that often include tech-enabled health management, the insurance industry in Mexico has struggled to serve this growing population.

See also: Product Development: Expanding Life Insurance for Diabetics

RGA Latin America recently partnered with a local insurance company and other collaborators to address this shortcoming. A strategic and thorough development process resulted in Amae, a digitally delivered insurance product and the first coverage targeted to individuals with Type 2 diabetes in Mexico. More than insurance alone, Amae provides access to a comprehensive platform of personalized services, such as diet and exercise plans, lab tests, and medical monitoring, and a wellness rewards program. Users can access all of these benefits through one online hub. Ultimately, Amae seeks to improve the quality of life for policyholders through a customized digital experience.

How to Digitalize the Insurance Customer Journey

The digital sales pilot for Amae launched on June 1, targeting consumers in Mexico City. Arriving at that point required an evolutionary growth process and collaboration with a range of local business partners – digital marketers, web developers, health services specialists, and other contributors – each bringing specialized and necessary expertise.

Amae has demonstrated early success at generating leads on social networks, especially Facebook, having reached a community of more than 130K followers in a period of seven months. This experience has provided key learnings about what it takes to be successful in this type of venture. Ten of the most noteworthy lessons are offered here:

  1. Aim for an unattended market – In Amae’s case that was people with Type 2 diabetes.  More than 10 million people in Mexico are living with this chronic disease.
  2. Untap the power of social media – You can find customers in need of your offering by using powerful segmentation algorithms on social media platforms and optimize the cost of your digital campaigns.
  3. Create community – It is important to create an interactive digital platform that connects users who share interests. An online community can also help relate success stories and inform the target audience about product benefits.
  4. Make it about them – Design the offering by putting the customer’s concerns and needs at the center of the services and functionality of the digital solution.
  5. Move beyond traditional, but don’t forget the basics – When designing the risk selection process, traditional underwriting considerations remain important, but open your mind to alternative ways to assess risk as well. Look for opportunities to include more people by incentivizing disclosure and applying data analytics to pre-screen prospects when possible.
  6. Choose the right partners – The digital journey is a complex one that requires alignment among many functions: graphic design, digital marketing, app development, internet of things (IoT) integration, and online sales optimization. It is best if an insurer already has modern and flexible systems, designated decision-makers, and existing customer service capabilities to scale up through digital channels. Reinsurers also play a vital role, providing depth and breadth in multiple areas of expertise, from data analytics and underwriting to risk management and claims adjudication.
  7. Create an ecosystem – Establish an environment where the insurance product converges with other offerings, such as expert wellness advice, telemedicine, IoT-enabled medical and activity monitoring, and discounts on related goods and services. A rewards program can add a gamification element and further increase loyalty. Partner with established firms and brands already providing products and solutions in order to enrich the offering in the eyes of customers. For example, Amae offers a leading-brand glucometer at a discount along with the ability to monitor results on its smartphone app.
  8. Apply a comprehensive revenue model – Beyond premiums and claims, a complex digital offering must also account for its many different features and functions and incorporate those costs into pricing. It is key to have expectations aligned and maintain big upside potential for all partners and investors.
  9. Maintain control of the brand and key tech components – Keeping control of the channel and digital tools ensures long-term ownership if the product proves successful. Look ahead and seek to avoid future conflicts within the market you are serving.
  10. Be agile and prepared to adapt – As the industry modernizes and digitalization increases, insurers must become more agile and efficient in order to keep up with the sheer pace of change. This agility applies across the customer journey of today and the many new customer touchpoints sure to emerge moving forward.

See also: Insurance Innovation: Six Steps to Success

The Amae team continues to learn new ways to most effectively market the benefits of the platform to the community and ultimately convert these benefits to insurance sales. The team is hopeful that Amae will eventually lead to opportunities to offer insurance products to people living with other chronic diseases and believes this innovation will change the way insurance is conceptualized and sold in Mexico.

The ten success factors above provide a roadmap for insurers and their business partners seeking to bring new digital insurance products to market. As more insurers go through this digital transformation, processes will improve and consumers will be more comfortable buying insurance through this new distribution channel.

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