Verily, Alphabet Inc. life sciences unit, on Tuesday said it will enter health insurance business with a new subsidiary named Coefficient Insurance.
The insurance company, backed by Swiss Re Corporate Solutions, the commercial unit of Swiss Re Group will sell stop-loss insurance. Employer stop-loss is a segment of commercial insurance that protects self-funded employers from unexpected and large employee health benefit claims.
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Employers who pay for health claims of the employees out of their pocket get reimbursed for claims above a defined amount.
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“Coefficient is aimed at reducing blind spots and providing greater cost control mechanisms for self-funded employers,” Andy Conrad, CEO, Verily said.
While, Andreas Berger, CEO, Swiss Re Corporate Solutions said that the Swiss is building on a strong foundation by partnering with Alphabet's Verily to use advanced technology and data analytics to innovate risk management in the employer stop-loss space..
Alphabet launched Verily in 2015 to develop tools and devices to collect, organize and activate health data, and creates interventions to prevent and manage disease.
With Coefficient, Verily aims to provide self-funded employers with more predictable benefit plan protection. It uses an analytics-based underwriting engine to identify unexpected areas of cost volatility, and cover those exposures with more dynamic and precise insurance policy provisions.
The firm plans to use big data as a health insurance tool by integrating Verily’s health devices and tech-driven interventions into solutions to improve health outcomes and control cost.
“Over time, we look forward to integrating Coefficient with Verily’s employer health solutions, including mobile health devices and innovative care management programs, in order to align payment models with better health outcomes,” Conrad said.
In connection with this investment, Ivan Gonzalez, CEO North America, Swiss Re Corporate Solutions, is expected to join the Coefficient Board of Directors upon closing.
