Following insurer John Hancock’s announcement a few months ago about its first “interactive” policy that incudes digital fitness tracking, the dialogue surrounding the use of wearable fitness trackers in life and health insurance has been fierce.
“There are massive pros,” chimes in Laird Rixford, CEO of Insurance Technologies Corporation (ITC), “because tracking data and keeping people accountable is a proven way to affect behavior. The consumer feels they will get a better rate by being healthy and active. Artificial intelligence and neurolearning are able to take data from wearable trackers and make proactive suggestions, such as tips on how to improve your next workout, which creates a more long-term dialogue between the insurer and the client.” This win-win scenario has benefits for the insurer and the user, who will make active steps towards a healthier lifestyle and target their health needs using data from a tracker, while the insurer benefits from having a client on a policy that takes longer to mature.
But, where there are pros, there are cons, and Rixford points out the biggest concern for most consumers when it comes to wearable trackers: privacy.
“All of a sudden, a life insurance company is privy to massive amounts of protected health data: your heart rate, your EKG, the amount you work out,” he said. “Those are all data points you share with your doctor, and stay with your doctor under HIPPA, but now you are actively sharing that with a third party to save a few dollars.”
And privacy concerns are not just limited to the insured. Insurers also carry concern over the liability of collecting mass amounts of protected health information. And with many wearable tracker users being millennials, who have a reputation of being more frivolous when it comes to sharing personal data, privacy concerns only grow and grow. Also, being what they are, wearable trackers are not perfect, and they can create events and triggers that are not reality, shares Rixford. “So, if a life or health insurer starts to use this data more and more, there’s a chance that the data they rely on is itself unreliable.”
So, what can agents and brokers do to best advise their clients around the pros and cons of wearables?
“This is technology that is meant to make our lives better, and by using this technology properly, then yes, it does make our lives better,” he said. “But improper use just makes that technology worthless. Agents and brokers should educate consumers about how wearables really impact insurance going forward, and also talk about the pros and cons. That’s a great conversation starter for any broker to have with their clients to maintain that advisory role.”