In the world of health insurance, performance is not only measured in bottom-line profits, but also in health outcomes. Artificial intelligence (AI) and machine learning technologies are rapidly transforming how patients, hospitals, pharmaceutical companies, and insurers across the ecosystem approach healthcare. For insurance companies, this pressure is compounded by industry trends including regulatory uncertainty,, consolidation, and new entrants. While the rise of AI has increased risk from competitors, technology also offers the possibility to adapt. Carriers can create AI-powered products reducing the need for costly treatments while optimizing existing processes.
Among the insurance companies facing these pressures is Cigna—a global health service company with 95 million customers which has successfully navigated the landscape over the past 200+ years. To maintain its market position through the technological arms race, Cigna must continue to innovate and adapt as competitors adopt AI and machine learning capabilities.
Quick wins: Driving customer education and engagement
To realize gains in the near-term, Cigna is focused on offering “easy to understand, affordable products.” Like many carriers, Cigna offers a range of programs designed to improve customer satisfaction, health outcomes, and cost-efficiency through prevention and early detection. Educating and engaging users, however, presents a major obstacle in realizing the potential of these initiatives. To combat knowledge gaps, Cigna has adapted its user-engagement processes and leveraged partnerships. Examples of these initiatives include:
- Answers by Cigna: AI-enabled voice offering on Amazon’s Alexa platform answering 150+ common questions while personalizing and simplifying health benefits information.
- Samsung S Health: App promoting healthy behaviors across 500 million devices worldwide. Cigna collects biometric data from Samsung devices and leverages its AI-analytics engine to personalize health recommendations including goal-setting and gamified accountability alerts spanning exercise, food, sleep, stress, and weight (see Exhibits 1 and 2).
- Microsoft Hololens: Virtual reality game, BioBall, measures key health indicators accounting for “the majority of preventable chronic disease and health care costs.” Through gameplay, enrollees are given personal vital-statistics and offered suggestions to reduce health risks (see Exhibit 3).
Together, these initiatives are helping transform Cigna from a commodity carrier to a personal engagement platform. Alongside Cigna’s broader user-engagement program, One Guide, the company saw 34% more interactions and 20% higher customer satisfaction in 2017.
Long-term gains: Prediction and prevention through artificial intelligence
Rather than developing internal processes for building AI tools, Cigna merged with Express Scripts and launched Cigna Ventures, a $250 million fund, to invest in start-ups. Key long-term investments include:
- Express Scripts: Cigna acquired Express Scripts for $52 billion in September 2018. Integrating drug databases enabled Cigna to adopt AI-powered approval processes for specialty medications, decreasing operating costs. Additionally, AI-identified patients with adherence challenges are funneled to medication adherence education programs. Boosting compliance minimizes insurance payouts in the long-term by improving patient health. Cigna’s “Opioid Likely Overdose Risk Model” uses this AI engine to identify cases of misuse and has reduced opioid use among customers by 25%.
- Prognos: Prognos applies AI to lab diagnostics to refine “approaches to risk adjustment, clinical quality, and care management.” Using its clinical diagnostics information database (14 billion medical records; 180 million patients), Prognos identifies patient needs early, enabling low-cost treatments and improved outcomes.
- Omada Health: Cigna led a $50 million investment round in Omada Health which uses machine learning to prevent diabetes by influencing patient diet and exercise. Behavioral changes trigger computer-generated suggestions screened by coaches as the system “learns” to influence patient behavior. Omada Health has helped users lose 4.7% of their body weight on average, saving ~$2,650 per beneficiary over 15 months.
What comes next?
While Cigna has made significant strides in its adoption of AI technologies, there are still gaps in its capabilities where competitors have made progress. Recommendations for Cigna include:
- Integrate offerings: Consolidate user-engagement products. Linking BioBall, S Health (expanding to iOS), Answers, and the Cigna platform will enrich insights, simplify the user experience, broaden the user base, standardize data collection, and inform macro-level decisions across geographic, demographic, and psychographic segments.
- Optimize claims-processing: About 8-10% of claims are filed incorrectly and an estimated “tens of billions of dollars each year” are fraudulent claims. Like its competitors, Cigna should develop AI-powered claims-processing which can automate the complex process (see Exhibits 4 and 5) and reduce division operating costs by 70-90% by 2030 or ~$15 million per 100 FTEs.
- Redesign organizational structure: Though Cigna has created a Global Chief Data and Analytics Officer role, the organization should adopt a matrix structure including AI-experts in each division.
While Cigna implements these recommendations, it must also consider the ramifications of AI on the evolution of healthcare. For Cigna, are acquisitions a good substitute for R&D investment? For Cigna’s users, will trust erode as risk-adjusted models leverage user health data to raise premiums?
The answers will have a significant impact on the industry for years to come—affecting insurance companies and the people who depend on them.
Exhibit 1: Screenshots of Samsung S Health App 
Exhibit 2: Experience map for Samsung S Health App
Exhibit 3: Cigna BioBall event with Microsoft Hololens 
Exhibit 4: Process map for claims-approval 
Exhibit 5: Funnel for AI-powered automated claims-processing 
Note: TNR is Total Net Reduction
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