Insurance companies and brokers need to do more to support the fast-growing digital health and wellness sector with more specialist coverage to meet its specific risk requirements, according to a new report.
The report, Spotlight on digital health and wellness, was commissioned by specialist insurer Beazley. It highlights attitudes about risk and insurance among digital health and wellness leaders in North America, Asia and Europe. It was based on a survey of more than 350 executives from established telehealth and telemedicine companies and those at the forefront of newer sub-sectors like mobile health, health software platforms and life science technology.
The report found that, despite broad optimism and an infusion of capital into the sector, many businesses are still under-insured, exposing them to the risk of financial and reputational damage. There is a lack of specialist insurance in place to protect against the particular risks faced by this sector. That includes the risk to physical health that can be caused by lost or false data, system failure or cyber breach leading to misdiagnosis or inappropriate or failed treatments.
Highlights from the report included:
- While 89% of respondents perceived the sector to be relatively high-risk, optimism was high, with 90% of businesses expecting to grow this year
- While 85% were confident that they knew what insurance coverage they needed, 70% were only covered for one or two of these risks
- More than two thirds lacked insurance coverage for bodily injury claims arising from system failure or cyber breach
- 36% said they’d struggled to find insurance that was right for their business
- 33% didn’t know what types of risk they needed to be covered for
- A third wanted more education on the risks they needed coverage for
“Digital health and wellness leaders have said they want our industry to improve how we communicate, share knowledge and collaborate to deliver more appropriate coverage, more effectively,” said Jennifer Schoenthal, global virtual care product leader at Beazley. “There is a huge opportunity for brokers and insurers to heed these messages. In particular, we need to work together to build holistic insurance solutions that focus more closely on the integrated risks these clients face to help them avoid risky gaps in their coverage.”
“Since we wrote our first telehealth risk in 2009, the digital health sector has continued to evolve in line with technological advancements and changing attitudes toward remote care among patients as well as health practitioners, governments and investors,” said Evan Smith, global head of miscellaneous medical and life sciences at Beazley. “However, the sector has grown exponentially from the beginning of the pandemic, fueled by an impressive track record in innovation, a wave of fresh capital, expansion plans and demand. In striving to deliver better risk mitigation and risk transfer, we can provide the protection and support digital health and wellness firms need to continue to strengthen their businesses and raise capital, and to develop the solutions that will play a key role in supporting public health and enabling future economic growth.”