Tag Archives: health

Behavioral Science and Life Insurance

Ask yourself these simple questions: Do I walk/run at least 5 km (3 miles) a day? Do I drive or take public transport everywhere I need to go? Do I drink more water than alcohol when having dinner at a restaurant with friends? At my lunch break, do I take 45 minutes to enjoy a healthy meal or eat fast food?

While some of us may have adopted very healthy lifestyles, many more have not. But what if technology and behavioral science could work together to help all of us live healthier, longer lives? The impact could be transformative. For example, the World Health Organization (WHO) found that the proportion of total global deaths due to chronic lifestyle diseases is expected to increase to 70% of the global burden of disease by 2030, up from 56% in 2015. A basic understanding of behavioral science, combined with advances in wearable and personalized technologies, could begin to make a tangible difference in risk assessment.

There are reasons, rooted in human psychology and behavior, that cause many of us to fail to act as we know we should. Cognitive biases, and the pressures of modern life, can defeat even the best intentions. For example, if you prefer red wine over water at dinner, you may fall into the “present bias” trap, or an aversion to delayed gratification in favor of an immediate reward. In other words, many of us would seize the prospect of a sip of a good cabernet over a less tangible future gain, such as healthier liver function.

Many of us are at pains to set objectives – avoiding an extra serving of cheesecake or sticking to the sparkling water over the pint of beer — but, despite the best plans, personal trainers and advice of friends, we fall into old habits. Similarly, many of us fail to follow through on New Year’s resolutions, a phenomenon behavioral scientists call the “intention-behavioral gap.” Often, our “doing-selves” do not follow the intentions of our “planning-selves.” We know we should take a real break to have a proper, healthy lunch but still end up ordering a snack.

Is there a way to help people achieve goals set by our “planning-selves?” Can insurers act to help people by designing value propositions that promote healthier behaviors? The answer may lie, in part, in whether carriers can fully grasp human biases and behaviors and harness technologies to use this knowledge to improve health.

Understanding Motivation

First, consider how people make decisions. In his book, “Thinking Fast and Slow,” famed behavioral scientist Daniel Kahneman argues that the human brain has two different operating systems: System 1 and System 2. “System 1” is fast, instinctive and emotional. “System 2” is slower, more deliberative and more logical. When we think of human decision making, we often assume that people are rational, calculating decision-makers (System 2) and therefore think that providing people with facts will change behavior.

Reality is a bit more complex. Matthew Battersby, chief behavioral scientist at RGA, often uses smoking as an example: “Lots of money has been spent for many years trying to inform and change the minds of smokers about the dangers and risks associated with the activity,” he says. “Many smokers know these risks yet still don’t change their behavior, and those who do change aren’t necessarily influenced simply by information. Instead, they may have been persuaded to stop smoking by various other factors, such as changes in the environment (e.g., smoke-free workplaces) and motivational aspects (e.g., it’s much harder to smoke when lots of your friends are no longer smoking).”

Even when consumers are well-informed about a health danger, some may continue destructive behaviors. Information alone — or System 2 thinking — is not enough. System 1 thinking may explain why; many smokers make instinctual, and perhaps irrational, decisions to continue the habit.

Most of us respond to environmental and social cues in a way that requires very little conscious engagement. Health decisions may be rational, but actual health behavior is much less so and more often driven by often unconscious, cognitive processes. Memory is also imperfect, and attention spans are limited, making fully fact-based decision-making even more difficult.

So, rather than bombarding a consumer with wellness data to encourage healthier behaviors, insurers can, instead, influence behavior by using use tools/mechanisms that target human System 1 responses (fast, impulsive), appealing to psychology and not rationality. This can take the form of reinforcement or reminders that focus attention on personal health goals and rewards or even celebratory messages when individuals reach health milestones, such as a certain step count.

See also: Life Insurance With Mortgage Protection

Applying Motivational Techniques

However, understanding human motivation is only half of the story. Success will require a means to reach the right customer, at the right time, with these messages. Wearable technologies offer a compelling means to help more people adopt healthier behavior, but they also present limits.

Why are wearables so promising? Consider the enormous popularity of these portable, data-rich devices. CNN Business reports that the Apple Watch sold 31 million units worldwide, while all Swiss watch brands combined sold 21 million units, according to research from consulting firm Strategy Analytics. Market researchers have found that 81% of wearable device owners feel that they have made an improvement in their overall health/lifestyles by using these devices.

So, the adoption of wearables technologies represents one step forward for the watch trade and one giant leap for the life/health insurance industry, right? Not necessarily. Many consumers appear to tire of these devices, and levels of comfort with health data-sharing can vary.

The COM-B model in behavioral science can help explain why. The model states that human behavior (B) consists of three components: capability (C), opportunity (O) and motivation (M). Capability refers to the belief that we are psychologically and physically able to change or improve a behavior. Opportunity refers to a social or physical opportunity to make a change (or reduce the environmental triggers that spurred negative behavior). Motivation is linked to the desire to carry out a certain behavior over competing behaviors.

Capability (I can cycle) and opportunity (cycling near home is safe) are obvious, but what about motivation? How do insurers get it, and how can insurers provide it?

Mastering Motivation

All of us have faced situations in which we must motivate someone to make a change, whether that person is a child, a coworker or a stranger. We use persuasive techniques that draw on behavioral science, often unknowingly. For example, it is common to promise a reward: Do X thing and receive Y benefit.

For organizations aiming to make us healthier and help us live longer, rewards make sense. But what rewards work? Behavioral science offers clues.

  • Frequent feedback: We are more likely to achieve a goal if we receive frequent and qualitative feedback, such as push notifications that congratulate users or explain areas of improvement.
  • Scarcity: Options or rewards that are perceived to be scarce can seem more attractive. For example, the idea of a “last chance” to win points can prompt someone using a wellness app to walk an extra 1,500 steps.
  • Commitment contracts: We are more likely to achieve goals if we have committed to them, so encouraging customers to commit to goals through contracts leads to greater success.
  • Messenger: Our reaction to information and messages depends greatly on the credibility of the messengers. For example, a recommended exercise regimen from a famous gym coach will carry greater weight than a suggested regimen from a friend.
  • Salience: Our attention is drawn to what is novel and prominent — that’s why “Walk Now” push notifications in health apps may increase our activity rates.
  • Relative ranking: We tend to do better if we can compare our performance with others. Competition yields results.
  • Utility: We act in ways that prioritize advantages, minimize losses and maximize perceived value. That’s why health programs and apps that allow participants to clearly evaluate value, such as weight loss or health improvement, can drive results.
  • Ease: We are more likely to change our behavior if we perceive that change to be easy. Programs that allow for incremental improvement, such as tips on how to walk 150 steps more per day, can yield greater participation.

Looking Forward

Insurance carriers are often perceived to have fewer customer interactions compared with other financial services providers, like banks. However, the ability to engage through wearables could create more active relationships that benefit both the consumer and the insurer.

The popularity of connected devices offers an opportunity to support insurers in offering services that can adapt to consumer behavior and support customers in managing personal risk and improving health. Insurance companies can move from being perceived as simply “providers of policies that protect against risks” to being seen as guardians of health and longevity.

Bridging Health and Productivity at Work

The wellbeing of our workforces is vitally important because it affects both the top- and bottom-line performance of an organization. Programs that focus equally on the personal health of employees and their professional productivity needs are becoming essential to help companies attract and retain talent. This was the subject of a recent “Out Front Ideas with Kimberly and Mark” webinar.

Our guests were:

  • Fikry Isaac, MD, MPH, the CEO of WellWorld Consulting and the retired chief medical officer, VP global health at Johnson & Johnson.
  • Andrew R. Gold, Pitney Bowes, VP, total rewards and HR technology
  • Alanna Fincke, SVP, director of content, meQuilibrium
  • Brad Smith PhD, VP, analytics and reporting, meQuilibrium

Why It Is Important

Wellbeing benefits individual workers as well as entire organizations and communities. It is a holistic approach that includes the mental, emotional, physical and financial health of the person.

First, wellbeing is a way to engage employees with one another and management within the company. Activities such as walking and fitness programs allow groups to come together in a fun way that helps build trust and camaraderie.

Wellbeing programs also can help employees become healthier by teaching them new habits and helping them get treatment for chronic conditions that they may not be aware they have. A screening, for example, can uncover risk factors for certain illnesses and help workers get the right medical care they need. The employee gets healthier and can continue working and earning a living. From the company’s standpoint, this helps improve productivity and controls the cost of medical care, so it is a win-win for everyone.

From a broader perspective, the environmental factors within and outside of the workplace also affect the overall wellbeing of the individual and should be addressed. The boundaries between work and home life have become blurred, putting added stress on workers. Wellbeing programs need to take into consideration many aspects of the person’s work and home life. They need to help the worker become resilient to be able to handle the demands and pressures of both.

Creating a culture of health within the workforce is paramount to the success of a wellbeing program. Any program or service within a company has to be ingrained in the culture for it to be successful. A wellbeing program needs to be part of the fabric of the business mindset so all employees – especially leaders – embrace the idea of a culture of health.


Resiliency is a newer concept that is gaining attention in workers’ compensation and on the benefit side. It is an important component in workplace wellbeing.

Today’s business climate is more stressful than ever. The pace of work makes it difficult to keep up. The work-life merger adds to it. All of this takes a toll on employees.

The latest trends show:

  • 60% of employees report high stress.
  • The annual cost of stress is $300 billion.
  • One million workers are absent from work every day.
  • 30% of the population has undiagnosed mental health issues.

Resilience teaches employees how to adapt to the changes and stresses of today’s work. While we cannot change the things that happen at work or in our lives, we can learn to change how we react and manage the stress. It is not something we are born with. There are scientifically based teachable skills to help us be more resilient. We can learn to control our thinking and how we react to pressures.

Evaluating the Need for a Wellbeing Program

Every company is different, and it is important when considering a wellbeing program to assess the organization’s needs against the value and impact of any given program. Some companies develop their own internal systems while others use commercial measures. Johnson & Johnson for example, surveys workers annually to determine where each person is on the health spectrum and how satisfied they are with the programs and services offered. The company also has a value system of management to assess the performance and engagement levels of leaders in the various business units.

See also: Wellness Programs Lack Health Literacy  

There are also a variety of tools available on the market to assess the need for wellbeing programs.

  • The Gallup-Sharecare WellBeing Index looks at the key factors that drive greater wellbeing for individuals and populations. It is the world’s largest data set on wellbeing.
  • Employee engagement surveys assess the level of employee engagement in their organizations and their perceptions of management’s involvement.
  • The Centers for Disease Control and Prevention Worksite Health Scorecard designed to assess whether companies have implemented science-based health promotion and protection interventions.
  • The Health Enhancement Research Organization (HERO) Scorecard is designed to focus on best practices for promoting workplace health and wellbeing. It shows what may be missing, the need and what employers can do to build a solid wellbeing program.

Pitney Bowes assesses the needs of its employees by talking to them directly and looking at various data. Feedback sessions, surveys and discussions with various department heads can reveal trends in a company that can be addressed through wellbeing programs. An important point in evaluating the workforce is to look at it holistically, not just a specific injury.

Solutions for Employers

Providing access for employees and their families to well-defined services can be effective in improving the wellbeing of a workforce. For larger corporations, onsite health clinics are ideal for quick issue resolution. They can also provide opportunities for preventive services and access to educational programs.

Access to services for mental and emotional support is another very important service, whether it is through an Employee Assistance Program or an online tool.

Energy management is an up-and-coming area to help with resilience. Companies that utilize it assess the energy level of their employees and provide training to increase their energy.

The number and types of programs that are available can seem overwhelming, but not all programs work for all companies. Employers need to identify those that fit the needs and culture of their own workforce.

One solution that companies are using is called meQuilibrium. Two of our panelists were from the firm, which uses behavioral psychology and neuroscience to help people manage stress. We typically do not include specific vendors in our webinars, but this is one instance where we thought it would be worthwhile.

meQuliibirum is a digital tool powered by data-driven insights that measure and benchmark. It is a skills-based learning product that begins with an assessment to determine how the worker reacts in certain situations, connects with his community, his level of sleep and a host of other issues. The user is then given tools to help him become more resilient.

Measuring Outcomes

Measuring the success of a wellbeing program should take into consideration both the effects on workers and the return on investment for the company. One technique is to look at the four Es: enrollment, engagement, efficacy and experience.

  • Enrollment is first and foremost because a program can’t have a significant impact on the bottom line if only a few employees are involved. Companies that have successful wellbeing enrollment use grassroots methods to spread the word, starting with senior management.
  • Engagement. Once you get workers in the door, keeping them involved is equally important. The percentage of people enrolled in any given month will tell you the level of engagement, as will how long they stay involved. It’s also important to know what elements of the program they are using.
  • Efficacy speaks to the effectiveness of the wellbeing program. Does it deliver what is promised? The best way to measure that is with an employer’s own data. For example, lower use of employee leaves suggests there is an improvement in employees’ resilience.
  • Experience refers to whether and how the program is helping employees. Is it changing their lives? Would they recommend it to their families or friends? Do they have stories about life-changing events due to the program? Those can show the success of the program.

The four Es are also applicable to the workers’ compensation program. Enrollment, for example, could pertain to whether and to what extent an injured worker is engaged with case management. Efficacy is also important because we often do not look at the return on investment (ROI) holistically in workers’ compensation across expense, medical and indemnity buckets. A Net Promoter Score (NPS) in workers’ compensation could be extremely valuable. There is an opportunity to use measurements from the benefits side of an organization to help an employer incorporate them into workers’ compensation so vendors and suppliers have a more consistent way of reporting metrics on the company.

HERO is another excellent way to measure success. This national non-profit organization is focused solely on identifying best practices of workplace and wellbeing to improve the lives of employees and their families. The HERO Scorecard can provide an instant assessment of a company’s wellbeing program compared to others in its database.

From an employer perspective, measuring the ROI of a wellbeing program can be difficult. All the various elements work together to drive improvement for workers, so it is hard to see the overall ROI, but you can look at various metrics. Some numbers may not look significant, but are important. An Employee Assistance Program may only have 3% to 6% of employees involved at any given time, but it is important to those workers using it, so it is important to understand benchmarks.

Other metrics that can be considered are things such as weight loss or other changes that measure benefits of the program. Additional metrics may also help, such as the data for care utilization, claims analysis, participation in wellness programs and lifestyle modification outcomes. There really is no one-size-fits-all way to measure the ROI of these programs, but the more details you can get, the better.

Another way to measure the success of a wellbeing program is to look at its return on value; how much workers are engaged in their work based on their perceptions of the company’s support in helping them be healthy and take care of their families.

The financial success of companies that have invested in health and wellbeing can be measured and is sometimes available in various publications. The American College of Occupational and Environmental Medicine, for example, has published studies showing the stock market performance of companies over time to see if there are differences after wellbeing programs have been implemented.

See also: Employee Wellness Plans’ Code of Conduct  

Challenges to Implementation

Putting a wellbeing program in place can be challenging, but taking a few extra steps will help.

  • Due diligence up front. Especially if you are using a third party, you need to really know what you are implementing. For example, if data is to be exchanged, what data and in what format?
  • Communication. One of the biggest challenges is getting the word out to the people who can benefit from the program. Some companies use various marketing tools such as behavioral economics to spread the word. There should also be some way to motivate people to participate. Monetary incentives are one method.
  • Effectiveness. It is important to monitor and see what is or is not working within the program and be willing to find a different approach, if needed.

Lessons Learned

Despite a company’s best efforts, not every piece of a wellbeing program will meet expectations. You want to make sure you carefully assess whatever you put in place. Something might be perfect for one organization but not work well for another.

Johnson & Johnson had to abandon a nurse line for employees because it just did not work. Pitney Bowes brought biometrics to company sites to make it more convenient for employees to get their blood drawn and get immediate results. But it turned out that method did not lead workers to take action. Instead, the company now pays employees to see a physician to get the same information. The physician can then persuade them to take action.

You have to look at the data and utilization to see if a particular program is valuable or not and be prepared to make adjustments, or even pull the plug entirely on a service, based on those results.

7 Reasons Why Health Premiums Are So High

As he blazed/thrashed/insulted his way to the White House, Donald Trump constantly claimed Obamacare was not working. According to Trump, it was a “disaster” that only he could fix. His criticisms have certainly been creative, such as this tweet about one of the perpetrators of the Boston Marathon bombing.

Whether Trump  can actually fix Obamacare remains to be seen, but he was right about one thing: Insurance premiums are on the rise. It’s estimated that in 2017 premiums will go up by approximately 24%.

Insurance companies like Aetna and UnitedHealthcare are pulling out of some markets after reporting significant losses, and other companies are significantly reducing the plans they offer.

But why exactly is this happening? What are the root causes?

While the issue is certainly complex, we do know some of the reasons costs keep rising. Here are seven primary reasons why Obamacare isn’t quite what everyone hoped.

Two Things You Need To Know

Before we depress you and make you worry about the future, let us give you two semi-good pieces of news. It’s not all gloom and doom.

The Increases Primarily Affect Those Who Purchase Their Own Insurance

First, it’s important to note that the rise in premiums primarily affects those who are purchasing their own insurance, like those who are self-employed. If you live in cubicle land or work for the man, you probably won’t feel the brunt of the increase in premiums.

Also, if you get your insurance through Medicaid, Veterans Affairs or Medicare, you probably won’t see much increase in your premiums.

However, those who shop in the insurance marketplace will find themselves staring at steeply increasing premiums. For now, you may be able to work from a beach while sipping a mojito, but soon you may need to start drinking Bud Light. Let’s hope that doesn’t happen. You may not be working for the man, but you’ll giving more money to the man.

Those Who Are Willing to Shop Around Will Probably Be Relatively Safe

If you get a government subsidy to offset the cost of your insurance premiums and are willing to shop around for a new plan, you may not be hurt by the increase in premiums. There are various plans available in the insurance marketplace, some more expensive than others. If you’re willing to switch to a new plan, you can probably find one that doesn’t gouge you so deeply.

But this is one of the problems with Obamacare. It usually covers a narrow selection of doctors and hospitals, and if you switch plans you may need to find a new doctor. If you’ve got challenging or complex health issues, this can be a big deal, especially if a particular doctor has been treating you for years. Unfortunately, this means that those who are in the worst health may get hit the hardest by the rate increases.

If you don’t want to switch plans, you always have the option of becoming independently wealthy. Of course, this can be a bit more difficult than switching plans unless you happen to have a rich relative.

See also: How to Push Back on Healthcare Premiums  

Now let’s talk about why premiums are going up.

Reason #1: Predictions Weren’t Very Good

Wait, you mean when the insurance companies and the government teamed up, they actually made some mistakes? But they both have such sterling reputations for efficiency!

It turns out that the health insurance companies underestimated how much it would cost them to insure those who weren’t already covered. A 2015 report found that insurance companies lost $2.7 billion in the individual market, in part because they had to cover more claims than expected. Insurance companies aren’t really in the business of losing money, and now they’re scrambling to make up for what they lost.

On top of this, those patients who are the sickest generate about 49% of the healthcare expenditures. This unequal distribution of costs complicates the estimates and means some companies are losing money.

Now that insurance companies actually understand the pools of patients, they’re adjusting premiums to account for the actual costs, which are way higher than they estimated.

Reason #2: Insurance Companies Are Bailing Out

Leading the way in the “Things That Aren’t Surprising” category is that many insurance companies are discontinuing plans that lose money. Additionally, some companies such as United Healthcare and Aetna are completely exiting some markets, leaving very little competition. In some states, there is a single insurance provider, allowing it to raise rates without consequence.

In 2017, it’s expected that the number of healthcare providers will drop by 3.9% in each state. As we all learned in introductory economics, less competition equals higher prices.

Reason #3: Healthcare Costs a Lot

Remember last year when the price of EpiPens started skyrocketing and people were saying, “We’ll die without them!” and the producer said, essentially, “Well, it stinks to be you!”? People got rightfully upset because that was a pretty low move to pull.

Unfortunately, rising medical costs aren’t just happening to EpiPens. Generally speaking, medical costs have been rising at about 5% each year, but some think they’re going to go up even more. Unfortunately, Obamacare is at least partially to blame for this.

Newer treatments tend to be very expensive, and now even the sickest people have access to health coverage. This, in turn, means that they have access to the pricey treatments they never had access to before. As their expenses are covered, overall costs for all people are increased.

As Sean Williams wrote:

The reason insurers are coping with substantially higher costs for Obamacare enrollees is actually pretty easy to understand. Prior to Obamacare’s implementation, insurers had the ability to handpick who they’d insure. This meant people with pre-existing conditions, who were potentially costly for insurers to treat, could be legally denied coverage. However, under Obamacare insurers aren’t allowed to deny coverage based on pre-existing conditions.

Now could be the time to begin experimenting with those homeopathic cures we’ve been hearing about all these years, like rubbing cucumbers on our feet or bathing in olive oil. Purchasing hundreds of gallons of olive oil is probably cheaper than premiums will be.

See also: More Transparency Needed on Premiums  

Reason #4: Some Government Subsidies for Insurers Are Ending

Since 2014, the government has provided some subsidies to marketplace insurers that cover higher-cost patients. These subsidies significantly reduced the cost to insurance companies and made them more inclined to work through the problems.

But this program is ending in 2017, and it’s expected that premiums will go up 4% to 7% as a result.

Reason #5: It’s Not Easy to Fix a Giant Market

Unfortunately, fixing a giant market like health insurance isn’t simple. This should surprise absolutely no one. First, the government is involved. Fixing anything government is always a nightmare, taking years of meetings, proposals and backroom deals. Second, the healthcare industry is involved, which is only slightly less unwieldy than the government.

Getting both of these entities to actually make progress is like trying to convince an elderly person that rock ‘n roll doesn’t sound like pots and pans banging together.

Lots of solutions have been proposed, but a single, straightforward solution has not been adopted.

Reason #6: The Market Is Smaller Than Expected

Chalk this one up to yet another miscalculation by the government. It turns out that significantly fewer people are enrolled in the insurance marketplace than expected. Like, 50% less.

Young adults in particular aren’t signing up, probably due to the fact that the penalty for not signing up has only been around $150.

A smaller market means that insurance companies can’t absorb the cost of particularly ill patients as easily. In larger cities, enough people may enroll to spread out the risks, but in smaller areas insurance companies are hit hard.

This, of course, causes insurance companies to pull out, increasing the problem even more.

Reason #7: The Rules Aren’t Helping Things

One of Obama’s big selling points for his healthcare plan was that insurance companies wouldn’t be able to deny coverage to those with preexisting conditions. This sounds great in the public square but doesn’t always work well in reality.

Currently, the government forces insurance companies to cover people but doesn’t offer the companies assistance when their costs exceed their revenues. If an insurance company doesn’t think it will make money, it will pull out faster than Donald Trump says something ill-advised.

See also: A New Way To Pay Long Term Care Insurance Premiums – Tax Free!  


It’s easy to be critical of Obamacare, but we should also recognize the great things it has achieved. Many people who would never have received medical coverage have been able to get the treatments they desperately wanted.

Will the problems be fixed? Let’s hope. But as we’ve seen, creating a solution that works for both consumers and insurance companies isn’t easy.

This article originally appeared at Life Insurance Post and has been republished with the permission of lifeinsurancepost.com.

How Many Steps Mean Longer Life?

Fitness trackers can be a convenient way to monitor the number of steps taken every day. Some insurers have even started using them as a proxy for good health, selling life cover to people who are already fit and who track their steps. Insurers may even reward policyholders’ physical activity with lower premiums and other incentives.

The assumption is that regular exercise, especially the number of steps taken, is a predictor of lower mortality. Exercise is known to confer health benefit by improving mental health, reducing cardiovascular risk and lowering cancer mortality. The question is, how many steps might lead to a longer life?

Adult walking cadence is 100 steps per minute, a rate that demarks the lower end of moderate-intensity exercise. The World Health Organization suggests an ambitious minimum of 150 minutes of “moderate-intensity” aerobic physical exercise throughout the week, or 75 minutes of vigorous-intensity or a combination (setting aside recommendations for muscle strengthening). Public health authorities across the world have adopted these guidelines to help people improve health, build stamina and burn excess calories.

See also: Wearables: Game Changer or a Fad?  

Manufacturers of fitness trackers and wearable technology, ever since the Japanese pedometer that came out for the 1964 Olympics, have commonly set the goal at 10,000 steps a day, a marketing ploy not rooted in science or WHO guidelines. Although this “10,000 steps” goal varies greatly by leg length and gait, it translates into roughly five miles a day for the average person and remains a considerable distance, especially considering that the average British adult walks 3,000 to 4,000 steps daily. The figure encourages sedentary people to move but isn’t a magic number on a doorway to health nirvana. Even 5,000 steps a day could be too high for some older adults or people with chronic illness, but small increases will confer health benefits.

It’s also important to distinguish between incidental and session-based physical exercise. Incidental exercise is the result of steps taken during the course of the day to get us from A to B, but it neither accounts for the pace nor intensity of the exercise or the true level of fitness. A three-hour workout “session” requires a much higher level of fitness than just walking, not to mention a significant level of motivation.

Insurance products that discount for steps walked each day are likely to have broader appeal than those that mandate “session-based” exercise. Asking additionally for, say, three hours per week of sweat-inducing exercise could literally be a step too far. Those unaccustomed to such levels of exercise are likely to conclude that this insurance product is not designed with them in mind.

Recent evidence suggests activity tracking brings no immediate measurable health benefit but this misses the point. Regular exercise has benefits that are not necessarily related to easily measurable variables such as weight and blood pressure. It’s important to understand that long-term outcomes are what are important for insurers.

See also: Wearable Tech Raises Privacy Concerns  

Although the WHO recommends 150 minutes of moderate-intensity exercise a week for ages 18 to 64, a critical review of the literature indicates that just half this level still brings marked health benefits. This suggests insurers could lower the bar and design life insurance programs that would also appeal to older people or those with chronic disease or restricted mobility, who may otherwise rule out buying a policy explicitly linked to fitness.

Do Health Apps Threaten Privacy?

The growing use of smartphone apps and wearable devices to generate personal health and lifestyle data poses a dilemma for privacy. While individuals have much to gain using apps to help them manage health concerns, the privacy of the data itself may be at risk.

Consumer-grade devices that link across internet networks are rather vulnerable to hacking. The levels of security that can be tolerated by users fall short of enterprise networks. The portability of wearables and smart devices, carelessness with passwords and lack of encryption mean confidential data is much more at risk of being stolen.

See also: 5 Apps That May Transform Healthcare  

Apps use a program interface (API) to access sensors in devices themselves — GPS, messages, even the camera — and to collect data. Many apps combine data to draw conclusions (accurate or otherwise) about the user’s health. Some insurers are already using activity data from fitness trackers to enhance products. It seems likely the trend will continue as apps become more sophisticated and hardware develops broader appeal.

U.S. federal and state laws require published policies concerning the use, disclosure and safeguarding of personal data by mobile apps. Health data are subject to special restrictions. In addition to imposing restrictions on sale and disclosure on all personal data on apps, EU data protection directives and national laws have more restrictions for health data; for example, explicit consent requirements. Apps must comply with all applicable legal requirements for processing health data and personal data more generally, including consent requirements of various levels of specificity and explicitness for different types of uses and disclosures of different types of personal data.

It may not occur to most users of a fitness app that their personal data will be disclosed to the device manufacturers, which may sell it to third-party advertisers or share it with data aggregators. The terms and conditions of apps are not always read, or the developer is based beyond national legal boundaries. The relatively short life cycle of many apps could also mean personal data may end up lost as the apps become defunct.

A survey by the Global Privacy Enforcement Network found that, in 85% of the 1,200 apps reviewed, the owners failed to clearly explain how they were collecting, using and disclosing personal information. EMEI (unique serial) numbers of smartphones make identification of individuals simple, and many app users mistakenly believe their information stays private.

See also: Wearable Tech Raises Privacy Concerns  

I have previously written about how wearables and apps that use smartphones as a hub can play an important role in life and health insurance (see my slideshare: The Growing Impact of Wearables on Digital Health and Insurance). Research in the U.K. shows half the population now monitors their health problems this way, and 95% of doctors see more patients bringing their own data to appointments. The trend is expected to continue — more than 140 million wearables are expected to be sold in 2020, up from around 70 million in 2014.

Underwriters and claims assessors will process increasing levels of digital health data in their day-to-day work. However, if patients cannot believe the health data they store in apps is private, they may resist calls from clinicians to use them. It’s important to address concerns over data privacy or failures to protect individual’s sensitive information, so patients’ resistance does not stall this innovation.

© Reproduced with the permission of General Reinsurance AG, 2017.