Wearables Reach a New Level of Legitimacy
Trading personal data for an insurance discount isn’t anything new. Several car insurance companies offer rebates to those who allow their driving habits to be tracked, with monitoring devices in the car collecting data such as driving ranges, speeds and stopping distances. Over time, safer drivers are offered lower insurance rates. Technologies are enabling a new level of fairness.
Now that trackers for human bodies have become more accurate and socially acceptable, insurance firms are looking to use the resulting personal data to determine pricing based on activity levels. Healthy living can be encouraged, monitored and rewarded thanks to lifelogging wearables.
Several life insurance companies across the globe are turning to personal activity trackers to help determine the risk levels of policy holders. The devices also have a built-in ability to discourage dormancy.
Last week, American insurance firm John Hancock introduced a rewards programme to inspire customers to live more active lifestyles. The company says it’s changing life insurance by becoming more involved in its clients’ daily habits. Company videos show apparent policy holders feeling happy, healthy and lively thanks to eating right and exercising regularly. The company and its partner, the Vitality Group, provide a free Fitbit to subscribers. It’s the Internet of insurance.
The company admits that this is partly a publicity stunt, helping to raise awareness of life insurance among younger, gadget-friendly audiences. John Hancock discounts can reach up to 15%, making it possible to calculate the price of privacy: good behaviour could see savings amount to about $100 per year.
Being tethered to a particular company or government agency raises privacy concerns, but life insurance firms say they won’t sell personal information. The limits of sharing private details are constantly tested in the age of social media, and it’s difficult to say if consumers will see company trackers as mutually beneficial progress or tracking taken too far.
However, the notion that wearables can now take on the part-time role of an actuarial scientist is testament to how serious trackers have become. It’s a level of legitimacy for the unregulated gadgets, and respect will grow with time as sensors become more precise and ubiquitous. These aren’t healthcare devices, but even readily available, relatively low-cost wearables can collect and contribute information for real-world use.
Wearables are no longer superfluous gadgetry. This is a stamp of approval the industry should wear with pride.
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