Innovation in Insurance Product Development

In the famous Apollo 13 mission to the moon, an explosion on board the ship forced a cancellation of the moon landing and necessitated an emergency return trip home. In order to make it back alive, the crew needed to assemble new air filters using nothing but items available on the ship, instructions transmitted from engineers back on Earth, and their own know-how – all in a matter of hours! Almost miraculously, they succeeded.

While insurance product development certainly doesn’t rival the urgency or excitement of saving a doomed space mission, both processes actually follow the same general steps to achieve success: define the need, optimize resources, and execute the solution.

At RGA, we recently partnered with an insurer in Italy to launch a market-first product. To do so, we leveraged the capabilities and experience of our client, our own local team in Italy, and our global RGA enterprise, as well as all disciplines within each of those teams – actuarial, underwriting, claims management, and business development. The result was an individual medical reimbursement product providing high-value coverage for one of the most challenging impairments: cancer.

Define the Need

The National Health Service in Italy provides universal cover – free of charge for inpatient treatments and with a copayment for outpatient services. For oncology drugs, however, a complex authorization process has created regional disparities and a coverage gap for cancer patients.

After being approved by the European Medicines Agency (EMA) and the Agenzia Italiana del Farmaco (AIFA), a drug must undergo an additional authorization process before being made available in hospitals. This process varies among the 20 Italian regions as well as local healthcare authorities, or Azienda di Sanità Locale (ASL).

Commissions can autonomously determine covered access to medicines within their region, thus creating disparities throughout the country and even within a region itself. A commission cannot list a drug which is not authorized by AIFA in its tariff schedule, but may choose to exclude one that has been approved. The result: availability of medicines may be reduced or significantly delayed for some citizens.

Optimize Resources

Recognizing this systemic shortcoming, RGA partnered with one of the leading insurers in Italy to develop a product that provides cancer patients with affordable access to the best oncological treatments, regardless of where they live in the country.

Collaboration was essential to the product development process, and alignment of strategy and capabilities among all parties ensured success. By sharing resources, experience, and expertise, multiple teams together created an innovative solution:

• Business developers, actuaries, underwriters, and claims professionals from both RGA Italy and our client partner combined efforts and committed significant resources to complete the project.   
• Within RGA Italy, life and health teams came together to implement an innovative underwriting approach, enabling applicants with a family history of cancer to be approved for coverage.
• RGA’s Global Health team brought international experience to bear, specifically knowledge of successful cancer products launched in markets such as Hong Kong. 

Teams sought to not only address cancer drug coverage, but to deliver a range of benefits to meet the many needs of cancer patients and their families. The result is a product that offers clear value for prospective customers and peace-of-mind protection against a recognized health system gap.

Execute the Solution

RGA’s new cancer product in Italy includes the following innovative features:

• Insureds diagnosed with cancer have €300,000 available for the reimbursement of inpatient or outpatient expenses. These may include hospitalization and surgeries, oncological treatments, high-end and standard diagnostics, specialist visits, reconstructive surgery, pharmacological treatments, and follow-up visits.
• The €300,000 may be used over the years, until depletion, for therapeutic and oncological treatments carried out with innovative medicines not covered by the National Health Service, but which have been approved by EMA (European Medicines Agency).
• All treatments, either at first diagnosis or in case of recurrences or diverse cancer onset, may be carried out throughout Europe at private facilities (thus avoiding any NHS waiting times) or public. In the latter case, insureds will be paid substitutive hospital cash.
• Additional caring benefits provide a high-value upgrade of the core insurance cover. Covered benefits include psychologic counselling, physiotherapy and rehabilitation treatments, and nutritional counseling, as well as alternative medicine therapies such as homeopathy and acupuncture.
• As the product is sold via bancassurance, RGA created a cancer-specific and easy-to-complete medical questionnaire, which includes a question about family history. In specific cases, applicants whose family members (parents and/or siblings) were diagnosed with certain types of cancer within certain age limits may be approved for coverage (with appropriate loadings applied to the book premiums based on an RGA-developed matrix).
• One of the most noteworthy benefits of the product is that if the insurance company decides to withdraw this product from its catalog, the insurance cover shall remain valid for a further five-year period for policies where the insureds have already been diagnosed with cancer and are undergoing treatments.
• In the unfortunate event of death of the insured while covered by this plan, the policy will provide a compassionate death benefit to the insured’s legal heirs, regardless of the cause of death.

To have a lasting impact, a product must offer not only unique advantages in the product itself, but a differentiated capability system to carry out its ongoing success. RGA’s reinsurance backing and proven ability to adapt products as markets evolve help provide that differentiation for our clients – including our partner on this project in Italy. Learn more about product development at RGA.

Innovation in insurance doesn’t occur by accident. It takes a disciplined approach and an ongoing commitment to meet the needs of the customers we serve. And although the process may sometimes seem like travelling to the moon and back, it is worth the journey.