Wearables: Game Changer or a Fad?

Some life insurers now use data from fitness trackers to lower premiums. But does a policyholder’s number of steps really improve mortality?

Some life insurers now use data from fitness trackers to lower premiums. But does a policyholder’s number of steps really improve his or her mortality? Despite the link between a sedentary life and the risk of heart disease or cancer being well known, there is no consensus on how many daily steps reduce this risk. A popular daily target is 10,000 steps, but just a couple of thousand, when taken at a brisk pace, confer health benefits. There’s a good chance that a combination of positive lifestyle factors (maintaining a low BMI, avoiding tobacco, limiting alcohol and getting adequate sleep) improve mortality when combined with regular moderate exercise. Perhaps people who walk 10,000 steps or more every day already have this positive combination. See also: Wearable Technology: Benefits for Insurers   However, not everyone will find appealing the request to use a tracker to monitor their progress toward the step target. One reason is data security. Also, cheap devices are inaccurate, and it’s not always clear how the data can be interpreted or integrated within existing processes at reasonable cost. Besides, not everyone can maintain or reach the target levels of physical activity. [caption id="attachment_25326" align="alignnone" width="500"] Concept of connected health and fitness tracker and devices such as smart phone, tablet and wearable for a digital lifestyle[/caption] In the U.K. in 2015, gym memberships grew to 8.5 million. While the fitness sector expanded that year, the number of people in England engaged every week in physical activity fell, and the keep-fit and gym sectors suffered the biggest drop. People stop attending the gym due to lack of motivation, time or just feeling out of place. There is also evidence that wearable tech is losing some allure. Analysts reported that by November 2016 smartwatch sales declined 50% year-on-year. Several manufacturers of fitness bands are rethinking their participation in the consumer wearables market while others are laying off staff. Insurers may be wary of attaching themselves to fads, such as the use of fitness trackers, but the concern about long-term health isn’t going away. The growth in popularity of consumer technology suggests the industry faces more fundamental change. Technology is affecting consumers' empowerment, making them better informed and more demanding. People accustomed to using smartphone apps to order taxicabs and manage their bank accounts expect insurance propositions to offer similar levels of simplicity, service and convenience. While most people may not care about life insurance, they do care about having a long and healthy life. See also: The Case for Connected Wearables   This explains why insurance programs linked with fitness tracking have proved popular. But individuals with mental health problems, poor mobility or chronic illnesses, such as diabetes, may not care to link their coverage with physical activity. Insurers can harness technology to add value for these customers as well -- by prioritizing their emotional and wellness needs. Providing policyholders with practical support in the form of tutorials and online help could help prevent their health from worsening and mitigate the impact when it does. © Reproduced with the permission of General Reinsurance AG, 2017.

Ross Campbell

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Ross Campbell

Ross Campbell is chief underwriter, research and development, based in Gen Re’s London office.


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