" class="no-js "lang="en-US"> Exclusive: 'Wealth in Health’ – Peter Ohnemus, Dacadoo in “The Insurtech Magazine” - Fintech Finance
Tuesday, April 23, 2024

Exclusive: ‘Wealth in Health’ – Peter Ohnemus, Dacadoo in “The Insurtech Magazine”

Could data gathered via more digitally engaged insurers have flagged the impending COVID crisis sooner? Peter Ohnemus, founder of B2B insurtech Dacadoo, believes so, which is why redesigning the industry’s approach will do both it, and society, a massive service Peter Ohnemus, Dacadoo | Fintech Finance

If the pandemic has forced governments to prioritise public health over public wealth, that’s not because the two are in opposition.

Wealth and health have always been two sides of the same coin, but it’s taken a rampant virus to expose just how codependent these broad indicators of a well functioning society truly are. Nothing is black and white, and two key features of this pandemic graphically illustrate that. Lockdowns are a choice between excess COVID-19 deaths now and the excess deaths known to accompany a recession, which a lockdown will likely cause. Meanwhile, an element of remote working has been embraced by some companies, even as restrictions ease, in acknowledgement of the fact that a healthy and happy workforce at home generates more wealth than a stressed one in the office.

For an industry straddling health and wealth, insurance has traditionally offered a safety net rather than trapeze training for balancing the two. Your health insurer steps in when you’re sick, but is absent when you’re making decisions that affect your health. And life insurance kicks in when it’s already too late to make a lifestyle intervention that might prolong your existence.

As the founder, chairman, president and CEO of B2B insurtech Dacadoo, you could say Peter Ohnemus is consumed with addressing this distinctly inefficient system. The premise upon which Dacadoo is based is simple enough: if insurers take a more active role in the lives of their customers, encouraging healthier lifestyles, they save on claims while the consumer improves their health and their wealth (through discounted premiums) – and there’s that warm glow generated  from knowing their insurer is actually invested in their wellbeing.

Dacadoo is Ohnemus’ latest venture, but potentially the one that will leave his most impactful legacy. A serial entrepreneur, he sold his previous business, a sustainability rating firm called Asset4, to Thomson Reuters in 2009. A year later, he turned his attention to the intersection of health and wealth.

“My previous business gave me the idea,” he says. “If you can carry out a sustainability rating of a company – looking at things like water and energy use – then you can rate the sustainability of a human life.”

And, so, he rolled up his sleeves and got to work, building the team to build the research that would program the algorithm that could deliver the goal. First came the Health Score – a measure designed to quantify any individual’s physical and mental condition. While there’s an element of gamification at the user interface to engage consumers in the rating process, it’s no gimmick. The assessment is based on 100 individual health data points, which are based on more than 300 million people years of clinical data.

“For five years we were like a biotech company,” says Ohnemus. “That’s how long we spent working on the Health Score, investing close to 20 million of our own money, to create a holistic, integrated overview of an individual’s health. It’s now our core product, and it’s built so that anyone can understand it. Even a 10-year old child understands that, if your Health Score is 100, on a scale of one to 1,000, maybe it’s not so good.”

Ease of understanding at the front-end, belies the complex artificial intelligence (AI) and machine learning going on at the back to create a single, personalised score. An obvious boon for risk underwriters, introducing an element of gamification means that if you’re someone who impulsively checks your social media, stocks or your daily steps, you’re likely to become a keen follower of your health rating, too.

Gamification is just one global trend that Dacadoo correctly anticipated. Another is the rise of wearable technology – a crucial source of the real-time health data that Dacadoo’s Health Score is based upon. Barely a market in 2010, when Ohnemus began the project, last year half a billion wearable devices were sold worldwide.

“Nanosensors are becoming more and more powerful, and that’s taking us into a completely new generation of healthcare,” says Ohnemus. “Healthcare today is the largest generator of data. We all know the Apple Watch, the Fitbit, the Garmin, but soon you’ll see hundreds of different sensor vendors that can automatically measure your blood glucose or your cholesterol, just by placing a small device on your skin.

“And the storage of all that data is getting cheaper, too, with the Cloud. If an insurance company or a bank wanted to store one petabyte of data 10 years ago, they’d have had to spend about €10million per year. Today, it costs less than $30,000 on the Cloud per month. And that’s only going to get cheaper.”

So, the business case for Dacadoo has unfolded to script – and the Switzerland-based firm hasn’t been short of takers for the Health Score tool, which insurance companies can integrate with their products via an API. In fact, soon, insurers started asking for more.

“The insurance companies came back to us and said ‘could you build this kind of machine learning and AI with the Health Score to help us create a next generation lifestyle coach?’ So, we built a 4,000 rules-based coach to encourage healthy living, sleeping, nutrition and activity.”

Working in tandem with the Health Score, this automated coaching feature couldn’t be more timely. Few of us were aware of ‘comorbidities’ before the pandemic – but the listing of diabetes, hypertension and obesity alongside COVID-19 on hundreds of thousands of death certificates has been a wake-up call for individuals who might previously have been careless with their health.

“Eighty-five per cent of all the people who have unfortunately passed away from COVID – and I lost good friends myself – also had one or more chronic diseases,” says Ohnemus. “So, an important proportion of deaths might have been prevented with a healthier lifestyle.”

A large-scale Oxford study from June, 2021, has already found that severe COVID-19 infections in young people could mostly be explained by obesity. This complemented a study of more than 48,000 patients in the US, published in April, which found physical inactivity is associated with the most severe COVID-19 outcomes. These health issues were already generating alarm before the coronavirus struck. In 2019, England saw more than a million hospital admissions for obesity-related treatments – up 17 per cent on the previous year.

Such figures have inspired Public Health England’s 2020-25 strategy, which targets poor diet and physical inactivity – alongside smoking and alcohol consumption – as the key behavioural risks to people’s health.

“The World Health Organization (WHO) also issued its global healthcare study in December,” adds Ohnemus, “and it said that only 39 per cent of all people worldwide are doing the recommended 75 to 150 minutes of real activity weekly.”

It’s another disheartening statistic for healthcare professionals who’ve been beating the daily exercise drum for decades. But such poor health also results in an eye-watering loss of wealth. A report from the Centers for Disease Control and Prevention recently estimated that 75 per cent of annual healthcare expenditure in the US – some $2.7trillion – is spent treating preventable chronic diseases.

In the US at least, insurers shoulder many of the costs associated with such poor lifestyle and health decisions. That means any feature they can add to their products to promote healthier lifestyles, could result in huge savings. A lifestyle coach appears invaluable when set against the growing epidemic of lifestyle related illnesses and deaths in the western world.

“The key objective for an insurance company is to look after you,” says Ohnemus. “But if nobody looks after themselves, the solidarity principles of insurance – of mutual interest – won’t hold. In that case the sector, in my view, will go bankrupt as we get older, because a lot of people are very sedentary.”

Promisingly, growing evidence in the past five years shows that wearable and app-driven lifestyle interventions do boost health. In March, a British Journal of Sports Medicine analysis found that fitness trackers and step counters helped overweight people shed 10lb on average. Other papers laud similar benefits, though most also highlight that people’s enthusiasm drops off after a time.


 

This article was published in The Insurtech Magazine #06, Page 4-6

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