If Not an Insurtech, What Is It?

We often get asked if Sofía is an insurtech and our response often is some form of, "well … yes, sort of." We don't really like the moniker of being an insurtech company because, yes, we operate an insurance company and yes, we use and love technology but that denomination doesn’t capture what we are really building. I’d like to lay out what that is.

From our mission statement: mejorar la forma en que millones de personas cuidan su salud (to improve how millions of people care for their health), we have clarity that we exist to make a change in healthcare. Then why bother becoming an insurance company? It sure seems like a lot of work to do something that isn't your end goal. The answer to that question is that to positively affect in a meaningful way someone's health, we need to be able to have long-term relationships with our users. This belief stands on two pillars. First, most of the time, people are relatively healthy; the number of days anyone interacts with a healthcare professional as a result of illness is very small in proportion to the number of days we are alive. Thus, for us to be there when people do fall ill, we have to be there next to them for a long time before and after they face an illness. The second pillar is that even though we're for the most part not ill, it is also true that we often don’t have the healthiest habits in some area or another of our lives, and thus, for us to be able to help people improve some of these potential bad habits, we again need to form long-term relationships with our customers.

The need to form long-term relationships with our users leads us to our business model as an insurance company. Most business models in healthcare are focused on points in time at which individuals seek care, with health insurance, however, we engage prior to these moments (which allows us to underwrite the risk of potential future illness) and after such episodes (which allows us to accompany our users in the aftermath of the illness, both financially and in terms of care). So, we created a health insurance company.

In the industry lingo, health insurance companies are payers but our aspiration is to improve healthcare not only healthcare financing. Our first hire was a physician and this was not random. We recognize that for us to be able to deliver on the promise of developing long-term relationships with our users, both financial and health-centric, it is not enough to cover their bills. Within Sofía, we have a dedicated medical team that is tasked with developing and implementing care protocols that we deploy through our network of partners, SofíaMed, which, crucially, also directly provides care. Today, this happens in the form of the Dr. de cabecera, which we assign to each one of our users and which provides a consistent point of contact for any care need. Over time, we will add new types of care that we will deliver directly by Sofía, both remotely through different forms of telemedicine, and also in-person care. We are encouraged by examples of how these models (often called payer-providers in the industry lingo) work at scale in other countries, like Kaiser Permanente in the US.

The former explains the insurance and healthcare angles of what we are building but technology has yet to enter the picture. To continue with the Kaiser Permanente example, KP was created in the first half of the 20th century, a point in time at which computers were far from commonplace and the internet wouldn't be invented for a couple more decades. If you were to start it today, the end result would look very different. You would make different decisions at an innumerable set of junctures. And if you were to synthesize this process into one central difference, it would be that you wouldn't arrange the whole system around a physical location that centralizes most types of care, like a hospital. Instead, you would organize the whole system around information. To put it another way, the main access point for the system would not be the hospital building, it would be the cellphone that everyone carries in their pocket. This also has deep consequences for how care delivery is actually arranged and optimized, which is a vast subject that I will discuss in another post (this topic has been explored at length in texts such as Clayton Christensen's The Innovator's Prescription, for example).

So, if we were to pick a buzzword description for Sofía, it would not be “health insurtech” or “the Uber of health insurance.” Rather, it would be something along the lines of “The Kaiser Permanente of Latin America, if it had started in the 2020s instead of 1940s."