Charles Bartlett.net

Category: Insurance

  • Insurers Harden Market for lack of Predictable Reserve Forecasting

    Insurers Harden Market for lack of Predictable Reserve Forecasting

    The COVID-19 pandemic has highlighted the pressing need for the insurance industry to adopt advanced analytics. The conventional approaches and manual methods are proving to be not enough in the face of increasing complexity and uncertainty.

    “…caution is still warranted as the ultimate result of many COVID-19 court cases remains unknown, and third-party investors are purchasing stakes in the litigation, which could contribute to social inflation. The war in Ukraine has added to reserve risk, as losses remain highly uncertain in lines that include aviation, political risk, cyber and D&O.”

    Swiss Re, Reserving: higher uncertainty puts adequacy in the spotlight

    Insurers looking to more sophisticated tools and methodologies to evaluate and manage risks effectively will need the combination of a customer-centric core policy admin platform. And the integration flexibility to quickly adopt the leading edge tools of tomorrow to remain competitive.

    By harnessing the power of data and analytics, insurers can gain valuable insights to make better-informed decisions and adapt swiftly to changing market dynamics. But only if they have the insurance technology platform that can change swiftly.

    It’s impossible to ignore the problematic issues benefits insurers will have to work with if they continue using modern legacy core systems. They simply weren’t designed with the expectation that the insurance industry would evolve as it has, so maintaining them is unsustainable.

    EIS, ‘5 Factors Affecting System Modernization in the Benefits Market’

    This transition to advanced analytics has become paramount in driving operational efficiency, identifying and mitigating risks, and ultimately, ensuring long-term business success in the insurance industry.

    Sources:


  • Economics of Generic Drugs are Win-Win

    Economics of Generic Drugs are Win-Win

    So what exactly are generic drugs and what is their impact on people and the healthcare services industry? And why are they not always prescribed?

    Generic Drug Economics – the same but cheaper…

    The economics of generic drugs play a significant role in the healthcare industry. Generic drugs are essentially the same as brand-name drugs, but they are sold at a much lower price. This creates a win-win situation for both patients and payers. Patients benefit from lower costs, making medications more accessible and affordable. Payers, such as insurance companies or the government, also benefit as generic drugs help reduce overall healthcare spending.

    Patents Expire – making them cheaper…

    The introduction of generic drugs is influenced by various factors. One important factor is patent expiration. When a brand-name drug’s patent expires, other pharmaceutical companies can produce generic versions. This promotes competition in the market, driving down prices. However, gaining regulatory approval for generic drugs can be a lengthy and expensive process. Manufacturers must prove that their product is bioequivalent to the brand-name drug through clinical trials.

    Brand Power – increases healthcare costs…

    But despite the benefits, there are barriers to the widespread adoption of generic drugs. One challenge is physician preferences. Doctors may have a preference for brand-name drugs due to a perceived higher quality or influence from pharmaceutical companies. Additionally, patients may also prefer brand-name drugs, often believing they are more effective. These factors can limit the use of generic drugs, leading to higher healthcare costs.

    Generic Drugs – reduce healthcare costs

    So the economics of generic drugs play a crucial role in reducing the cost of healthcare. They offer patients affordable alternatives to brand-name drugs, reducing overall healthcare spending. But again, challenges such as physician and patient preferences hinder their widespread adoption. Overcoming these barriers can lead to greater cost savings and improved accessibility to medications.

    References:

    Healthcare Economist, Jason Shafrin, ‘The Economics of Generic Drugs‘, 2023/07/11