ScienceSoft released proprietary research exploring the potential of behavior-based insurance (BBI) in life and health plans. Supported by statistical sources, first-hand expert opinions, and insights from BBI early movers, the report predicts that within 10 years, at least 60% of health insurers will offer some form of BBI alongside traditional coverage options.
ScienceSoft analyzed health BBI adoption trends and the competitive landscape in the US and revealed that the niche offers rewarding investment opportunities. To address scarce BBI market data, the research team looked into the motor insurance domain, where usage-based insurance (UBI) is well-established, and mapped the historical UBI trends that are likely to be mirrored in BBI. The study showcases the technological, regulatory, and social barriers to implementing BBI, citing the need for custom BBI software engineering as the biggest hurdle to early adopters.
The research focuses on the growing demand for BBI and the insureds’ willingness to share the necessary data as critical ROI drivers for health payers. ScienceSoft’s findings demonstrate that demand is sufficient to prove the economic feasibility of BBI initiatives. Peer-reviewed studies by Capgemini, Accenture, and other reputable sources confirm that the growing cost and complexity of traditional health plans push insureds to seek more affordable, personalized alternatives. Notably, 60–75% of US insurance customers cite BBI among their preferred health coverage options, with 50–70% ready to share health data with payers in exchange for lower premiums.
Beyond BBI’s opportunities for payers, the study examines the broader implications of this new model for the health insurance value chain and population well-being. In particular, ScienceSoft anticipates up to a 40% reduction in annual premiums for health-conscious insureds, enhanced preventive care quality, and the population’s overall health gains over time. It also highlights opportunities for insurance technology vendors to develop new BBI-specific solutions.
Read the full report for more insights.
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ScienceSoft is a financial technology consulting and software engineering company. In insurance IT since 2012, it has completed software projects for prominent insurance firms like Brush Claims, Frost Insurances, and USPlate. The company closely monitors insurtech developments and conducts proprietary research on the evolving insurance IT landscape.
