Like telematics for the auto-insurance industry, wearable health trackers are considered a new exciting field of study and adoption for health insurers around the world. By keeping an eye on their customer’s health, they can better risk profile them and therefore give them better – or worse, depending on their rating – premiums, which are much more likely to be accurate. On top of that, they can lead to users becoming more healthy in the long run, which makes them less likely to collect on their premium.
However despite the logic of this, there are still a number of insurers that aren’t convinced. In the latest survey from Accenture’s yearly technology report, it found that 63 per cent of insurers agreed that wearables were a very exciting trend that they could make use of in their industry. Out of all those quizzed however, only 31 per cent said that they currently utilised the tracking technology in order to improve their service or offerings to consumers.
One of the companies that is making good use of wearables is John HanCock Insurance, which announced earlier this year that all of its customers would be issued with a FitBit tracker which it hoped would encourage them to take part in healthy activities. Depending on what users do too, the insurer will potentially offer rewards and discounts on premiums.
The report goes on to say that of the 31 per cent of companies that had initiated the use of wearables to augment current tracking technologies and prediction systems, over half had seen a positive result in business and in the health of their customers.
The big problem that the industry may face however isn’t getting customers to use the wearables – at least in the short term – but what to do with the data once it’s collected. Wearable trackers from thousands or even millions of customers quickly produce a lot of data so the question is, where do insurers store it all? How long do they store it for? And what should they do with it in the mean time?
There is money to be made in selling the data on, but that could contravene international privacy law. The longer they keep it too, the higher chance there is of a security breach.
It’s a difficult road ahead, but an exciting one nonetheless.[Thanks InsuranceBusiness]