Yesterday at Consensus 2018, MetLife’s LumenLabs showed a demo of a new parametric insurance app. The Vitana product offers gestational diabetes insurance to expecting mothers in Singapore. Vitana is about to launch in a pilot phase.
In Singapore, healthcare insurance works differently to elsewhere. If someone has coverage, he or she will personally pay for medical care and claim it back later from the insurer.
Novel features – parametric and more
Most blockchain endeavors stick to one industry, this one incorporates both health and insurance. Many blockchain insurance projects focus on internal processes, whereas Vitana is a consumer application with a new revenue model.
The bulk of health records in Singapore are in manual silos. Vault Dragon, an Asian Electronic Medical Record provider, is a partner in this venture to help OB-GYN clinics to digitize. Given the insurance policy is parametric, for payouts the OB-GYN needs to provide the data to confirm a patient has gestational diabetes.
The CEO of Vault Dragon commented that OB-GYN’s saw no advantage in digitizing records until this app came along. Now they’re keen.
Vitana involves five parties: MetLife, reinsurer Swiss Re, systems integrator Cognizant, Vault Dragon, and the regulator.
Singapore provides a regulatory sandbox. Up to 300 expectant mothers can sign up within the next six months. Sufficient to get measurable results.
From Swiss Re’s perspective, they like to look at risks that are not currently financially protected. One in five pregnant mothers get gestational diabetes in Singapore. So this project is a good match for Swiss Re’s focus on closing protection gaps.
How it works
On the front end, there’s a mobile app which is unrelated to blockchain. The customer goes through the app and signs up for the insurance. The policy only deploys as a smart contract onto the private distributed ledger at the end, when the consumer pays and confirms.
No customer data resides on MetLife’s server.
There are no claims, only ‘payouts’. The insurer is not involved in the payout decision. Based on data that comes from the OB-GYN’s systems, the code will decide if a payout is needed. It will send the bank account details to the insurer. The insurer will decrypt it offline and make the payout immediately.
The payout logic and the entire policy logic is in the smart contract.
Zia Zaman, Chief Innovation Officer for MetLife in Asia, spoke about the advantage of parametric insurance. This contrasts with customers’ concerns that claims won’t get paid, which can have an impact on adoption.
Swiss Re’s JJ Carroll responded about the benefits of automated payout decisions: “It’s creating that confidence between the customer and the insurer. The transparency and the knowledge creates a much better experience for the customer.”
Microinsurance v Micro-Moment insurance
Zaman coined a new term: “I call it micro-moment insurance. And the reason is, people in the insurance industry in the room, they think microinsurance is for people at the bottom of the pyramid. It isn’t. Micro moment insurance is take a specific risk pool for a particular moment, and any of us might be interested in getting coverage for that.”
His final observation in closing was “you cant serve tomorrow’s customers with yesterday’s business models.”