US insurance firm plans to 'insure the uninsurable'

Metlife chief innovation officer Zia Zaman says that his company is looking at new offerings that differ from those offered by conventional life insurance policies.
Metlife chief innovation officer Zia Zaman says that his company is looking at new offerings that differ from those offered by conventional life insurance policies.PHOTO: DANIEL NEO FOR THE STRAITS TIMES

American insurer MetLife wants to turn insurance on its head, through the work now under way at its new innovation centre in Singapore.

The firm plans to use data to make insurable those who are uninsurable - such as people who suffer from chronic diseases or obesity.

Metlife chief innovation officer Zia Zaman said: "If we have more knowledge of people around us, with data collected from wearables and other sensors, as well as other kinds of tests, we can use it to price risk or avoid risk."

He cited the case of actress Angelina Jolie, who had a double mastectomy and removed her ovaries to prevent breast and ovarian cancer.

She carries the gene for these cancers and the surgery was to prevent her from developing the disease.

Mr Zaman said: "Insurance firms have calculated that the cost of treating the cancer is 33 times more than the cost of the double mastectomy. So, it is cheaper for an insurance firm to pay for the surgery."

Similarly, a person's health data can be used to help him manage or delay chronic diseases or lose weight. Mr Zaman said he believes people would be willing to pay a price for something that extends and enriches their life.

"We are looking at new offerings that are not like those offered by conventional life insurance policies. It is not about lowering premiums but taking the uninsurable and making them insurable."

This is different from the traditional services - such as making a financial payout upon death or in the event of a chronic illness - that insurance firms provide.

MetLife is exploring and developing these new offerings in its first innovation centre called LumenLab, at the Biopolis in Buona Vista.

LumenLab has been set up in response to the emergence of a new wave of financial technology start-ups that have fresh business strategies and new technologies that can disrupt today's financial services industry.

LumenLab has 12 staff. Since November last year, when it started, about 200 MetLife employees from its offices around the world have attended eight innovation workshops. About 160 ideas were put forward, of which 35 are being worked on.

Some of these ideas will be prototyped and MetLife will have to decide which idea will have the best financial gain, and invest in it. LumenLab will officially open on Thursday

A version of this article appeared in the print edition of The Straits Times on July 14, 2015, with the headline 'US insurance firm plans to 'insure the uninsurable''. Print Edition | Subscribe