Consumers in the US are showing a lot of enthusiasm for wearable devices. For example, US sales of connected wellness and personal health products and services are expected to exceed $8 billion by 2018, per Parks Associates research; more than 32 million U.S. consumers will actively track their personal health and fitness online or via mobile devices next year.
Nearly two-thirds of insurers expect wearable technologies to have a significant impact on their industry within the next two years, according to Accenture’s annual Technology Vision for Insurance 2015 report. Some life insurers are already deploying wearables to engage customers, employees or partners. For example, a leading insurer now offers a fitness tracker to customers for free when they sign up for a policy. By using the fitness trackers and sharing their data with the insurer, customers can earn life insurance discounts as much as 15 percent. The insurer, in turn, helps policyholders achieve key outcomes: saving money and improving health.
Rewarding customers with behavior-influenced, personalized pricing is just the beginning of how insurers can deploy wearable technology across their business. They could, for example, also tap the highly-personal biometrics data generated from wearables to more quickly evaluate applicants’ fitness levels and overall health condition when pricing policies. By enabling more regular policyholder health checks and risk assessments at a low cost, wearables could also allow life insurers to serve riskier and underserved segments of consumers—those with chronic diseases, such as high blood pressure and diabetes. Insurers can also incorporate fitness wearables into their employee wellness programs to help manage corporate healthcare costs and motivate employees toward healthier lifestyles.
To fully optimize wearable devices for business advantage, life insurers will need to invest to develop and enable their wearables strategy. This includes using technology innovation—robotics, platforms, cloud, analytics, advanced automation and others—to better manage even more data, integrate devices into life offerings, address privacy concerns and adapt to new customer behaviors.