Wearable computers are reshaping the customer experience in life insurance, enabling insurers to deliver more personalised products and incentives to consumers while helping their customers to lead healthier lives.
That’s according to Bryan McLachlan, Managing Director of ABSA Instant Life, one of the first life insurers in South Africa to leverage wearable technology in its life insurance products. He says life insurers are encouraging customers to adopt fitness wearables to monitor exercise, sleep and other health metrics. This, in turn, incentivises people to lead healthier lifestyles.
ABSA Instant Life’s FitLife Cover product offers customers a discount for simply wearing an activity and sleep tracking device. The company doesn’t use the data to penalise customers who show signs of unhealthy living; the goal is to get customers thinking about their health so that they can proactively change their habits.
“We find that customers start to exercise more and adopt better sleeping habits when they track their health using a fitness device,” says McLachlan. “As the technology matures, it will also be able to alert users about health issues such as the danger of a heart attack. In time, we could imagine life insurers, medical aid funds, health providers and other companies using this sort of data to coach customers about ways to reduce their health risks.”
Collecting big data
For the life insurer, the promise of fitness wearables is about collecting big data so that it can begin to model risk more accurately and better understand consumer behaviour, McLachlan says.
The key to making customers more comfortable with sharing their fitness and health data will be using this information in a fair, transparent and ethical manner, and following good practices in data privacy and protection. Life insurers will be able to put this data to work to create better products that are more tailored to the needs of different customer segments.
In addition, getting customers to use a fitness wearable each day helps life insurers to embed their brands and products in day-to-day life. It is a way for them to interact with customers beyond the sales process, the monthly debit order and claims, says McLachlan.
“Most people don’t want to claim on a life policy,” says McLachlan. “We see this as an opportunity to communicate with customers more regularly and to play a positive role in their lives as a company that has their interests at heart.”
From niche to mainstream
McLachlan expects health and fitness wearables to grow beyond a niche market to the mainstream as people become more comfortable with sharing their data with companies like insurers and begin to understand the benefits of doing so.
Wearables adoption is soaring worldwide, led by fitness trackers. International Data Corporation (IDC) says nearly 100 million wearable devices shipped in 2016. Around half were fitness trackers. This year, IDC expects around 125 million wearables to be sold.
In the not-too-distant future, new classes of wearables could change the way we think about personal health and fitness. Innovations such as ingestible sensors that send information from inside your body to your smartphone or allow health professionals to remotely track health indicators are already in prototype. Contact lenses can monitor blood sugar levels and there are even biometric ‘tattoos’ in development – apply a temporary piece of body art to your skin and it will track your heart rate, body temperature and so on.