5 Ways Insurers Benefit from Incorporating Wearables Into Products

 Wearables are revolutionizing the insurance industry. You’ve likely heard of this new model called “interactive insurance” in which wearables are incorporated into insurance policies and gifted to customers, often in exchange for fitness data. Accessing health data of current and potential customers enables insurers and underwriters to create tailored products and better assess risk. Interactive policies could also motivate customers to get healthier, resulting in fewer claims. Interactive insurance is disrupting this age-old industry by incorporating technology and utilizing it in new ways to benefit both insurers and customers. In this article we’ll list the benefits of interactive insurance:  

 

1. Access to accurate data 

When someone purchases life insurance, for instance, to determine how much that person should be charged depends on the health risk of the individual. Traditionally, life insurance companies use self-assessment questionnaires to determine a person’s health (some require a physical exam but not all). This self-reported data helps actuaries estimate the risk of the customer but it is not 100 percent accurate. With wearables, insurers can get a more accurate assessment of peoples’ resting heart rates and activity levels on a day-to-day basis, not just during a one-time doctor visit. They can gather and assess important health data, including cardiorespiratory fitness (CRF). Decades of evidence have proven that CRF (measured as VO2 max) is a leading predictor of health. In fact, the American Heart Association (AHA) recommends that CRF be regularly assessed. The AHA considers CRF a clinical vital sign. Health data recorded over a period of time gives insurers an accurate picture of overall heart health and CRF, giving them with a deeper understanding of their customers. 

 

2. Increased customer engagement and loyalty

Providing customers tools to improve their health can boost loyalty and positive feelings toward insurance companies. The offer of a free wearable in exchange for fitness data and the possibility of discounts and rewards is enticing enough to keep customers coming back as well as bring in new business. Insurers are also connecting with customers in a new way by starting a conversation about health and preventative care. This compassionate approach humanizes the insurance-purchasing process and will change the feelings people have toward insurance in general, possibly making the experience feel more like a “wellness” purchase rather than a business transaction. It’s time to change the way people experience insurance, by emphasizing the health of customers and potential customers. This can help build on existing customer relationships and initiate new ones by offering useful and effective offerings.

 

3. Attract new customers 

Target new customers by offering a free wearables or other free offers. Insurers can provide a free wearable in exchange for fitness data (heart rate data, VO2 max, etc.). Customers get a free wearable device, the chance the pay lower premiums-- if they’re healthy or show improvements in their health-- and can receive rewards for maintaining and improving their cardiorespiratory fitness (CRF). 

 

4. Learn more about your customers so you can reward them and engage with them in a more personalized way.

Sharing data in exchange for a discount or free service is not a new concept. With other types of insurance, like auto insurance for instance, customers can receive a discount for being a safe driver by letting insurers track their driving. Also, consider how much information consumers hand over for free services, including many social media platforms. Consumers also participate in loyalty programs where they get discounts and coupons for sharing information about their purchase behavior and preferences. 

 

5. Quickly identify people who are at-risk and help them make better lifestyle choices

By being granted access to customers’ wearable data, insurers can identify when people are becoming at-risk for health conditions and intervene. Insurers can provide customers with resources to help them get back on the right track. For insurers, this is a cost-saving measure, as well as a way to engage with customers and offer help. This is a win-win for both consumers and insurers. 



Do you have any questions about the benefits of interactive insurance? Leave a comment below. 


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