Alphabet pushed further into healthcare with a joint venture that aims to sell life insurance for people diagnosed with diabetes.
The Google parent as well as tech rivals including Apple and Amazon are seeking healthcare investments that leverage their digital networks, and in the case of Alphabet, its AI capabilities. Diabetes rates are rising around the globe, offering further opportunities for companies that invest heavily in research and development.
The partnership — between Alphabet’s Verily subsidiary, virtual diabetes clinic Onduo and John Hancock Life Insurance — will provide eligible customers with diabetes care starting next month, John Hancock said.
The program offers access to Onduo’s virtual clinic and diabetes management care team, which provides support, coaching and rewards, and potential savings on premiums of up to 25%. Life insurance costs for customers with diabetes sometimes are triple what a healthy person pays, according to insurance executives cited by the Wall Street Journal.
Venture capital firms also are boosting investments in healthcare sectors like medical supplies, insurance and diagnostics. VC firms raised $1.12 billion so far this year for life and health insurance investments, equal to all of 2018, according to PitchBook data. In medical supplies, venture firms have raised $650.5 million, a similar pace to the $742.3 million raised last year.
Healthcare technology systems, which include medical records, diagnostic equipment, supplies and devices, have seen $10.1 billion in VC investments this year to date, nearly on par with the $11.7 billion VC firms raised for the sector last year.
Verily raised $1 billion in a fundraising round led by tech-focused private equity firm Silver Lake earlier this year, as it seeks to grow Partner Space, its program for startup investment and collaboration.
Still, fewer U.S. households have life insurance today than at any time in the last 50 years. Market competition and consumers’ competing financial priorities have stifled demand, disrupted the traditional sales agent model, and left traditional companies fighting for relevance.
- In 2016, VC finance made inroads into the sector through companies including Ladder Financial, a Silicon Valley startup offering term life insurance for California residents that raised $14 million through a fundraising round with Canaan Partners. Investments began to skyrocket the following year.
- DeepMind’s healthcare team joined the Google Health family in September. Their AI-powered assistant known as Streams uses a deep-learning algorithm to monitor patients’ medical data and calculate the likely onset of acute kidney injury, a diagnosis that affects one in five patients in U.S. hospitals and proves fatal for nearly 300,000 patients each year.