Why efficient health insurance companies rely on focused insurance software

There is a persistent theory in the insurance industry that sounds logical and is often cited: the larger the health insurance company, the more efficiently it can operate. Economies of scale, better negotiating power, specialized teams – the logic seems to hold water.

But is it actually true?

What the FOPH data shows
The FOPH data paints a different picture. The average administrative costs for health insurance are around CHF 190 per insured person per year. At the same time, the gap between the cheapest and the most expensive provider is striking: it is roughly a fivefold difference.

Size alone, therefore, does not seem to determine how efficiently a health insurance company operates.

What efficient health insurance companies have in common
A closer look at the figures reveals an interesting commonality: four out of five of the efficient health insurance companies use the same software systems. They work with focused systems that are designed to interoperate with others and integrate flexibly into an existing IT landscape.

One possible reason for this can be seen in the numerous system adaptations that have been necessary in recent years. Formal, regulatory and process-related changes have had to be implemented on an ongoing basis.

This highlights the cost implications of complex, monolithic systems. These overarching systems cannot be adapted easily or in a targeted manner. Changes often affect many areas simultaneously, with new versions needing to be rolled out across the entire insurance organization and migrated accordingly.

This involves effort and costs and can have an impact on a health insurance company’s efficiency in the long term.

Focused systems are structured differently. They are more modular and make it possible to implement regulatory or process-related changes precisely where they are needed.

This can make a significant difference in terms of effort, cost and speed.

The AI factor
There is a second point that is becoming increasingly relevant for efficient insurers: the use of artificial intelligence.

Focused systems can integrate AI more easily – not as blind automation, but as a support for employees. This is partly due to their openness and clear interfaces.

AI can therefore be used where it creates tangible added value: for analyzing large volumes of data, for recurring tasks or to aid decision-making.

This reduces workloads while simultaneously improving quality.

Cases can be processed faster and in a more targeted manner. Employees receive better information and can focus their attention on cases that require experience and sound judgment.

Not only is this more efficient, it can also make work more interesting for employees and contribute to a better customer experience.

What we are seeing at BBT
Our customers who opt for focused systems demonstrate to us time and again that selecting insurance software is no longer purely an IT decision.

It is a strategic choice with long-term consequences.

The system architecture determines how quickly an insurer can respond to regulatory requirements and market changes. It influences how complex adjustments become and what opportunities arise for new technologies such as artificial intelligence.

It therefore also has an impact on competitiveness.

At BBT, we focus on software solutions for clearly defined core processes in the insurance industry. Our systems are designed to work alongside other solutions, to be flexibly expanded and to take advantage of new technological opportunities.