Insurers are exploring the use of wearable devices and fitness trackers to get a closer view of the insured.
FREMONT, CA: Wearable technology in insurance is much talked of its ability to collect data, to underwrite risk and manage on-going health claims, its impact on the health behavior of consumers and its potential to engage and retain consumers. With this digital technology and the data that consumers are willing to avail gives a closer look at people’s habits — ultimately helping insurers provide policies that reflect risks better.
Wearables are providing evidence sources to inform an underwriting decision, increase customer engagement, and enhance consumer health and wellbeing. Wearable technology in insurance wellness programs can potentially increase the insurability of people struggling with chronic diseases conditions, and offer a signal to insurers of the healthy insured, and improve the longevity of insurance customers. It is essential to understand the metrics captured by wearable devices for insurers to utilize that technology effectively.
Fitness tracking devices can gather health-related metrics that have the power to generate insights about the user’s mortality and morbidity risk. These metrics can be combined with data from other sources to yield faster underwriting decisions that are less invasive to the consumer than traditional underwriting methods. As wearable technology improves and devices become capable of gathering more sophisticated health-related data, it becomes more likely that insurers may be able to use wearable data to inform life insurance underwriting.
Insurance customers sometimes struggle to recognize the value of a product that protects over many years. Digital consumers, meanwhile, increasingly expect immediate benefits and ascribe value to experiential purchases. This shift in consumer preferences challenges insurers to remain relevant when the product being sold is both intangible and long-term. These devices can enable insurers to share health-related insights to consumers to help improve their health and wellbeing and provide additional value to the consumer beyond insurance protection. Additionally, these devices can reframe the relationship as a consumer-focused partnership.
As insurers look ahead to the innovative opportunities that wearable technology brings, they must also invest in robust data protection and management practices. Also ensure to make the best use of the data captured, and to consider investing in new forms.