Are wearables the key to lower life insurance premiums?

Are wearables the key to lower life insurance premiums?

Are wearables the key to lower life insurance premiums?
Are wearables the key to lower life insurance premiums?

Wearables are gaining traction in the healthcare sector – and could also have surprising benefits for insurers too.

Wearables might be about to open up a new front in the life insurance sector. Last November, Australian insurer MLC launched a programme called MLC On Track. It asked 1,500 customers to use a fitness tracker – the Intel Basis Peak. Customers could earn opportunities for up to a ten percent discount on their policies – for the life of the cover.

MLC said at launch that it would not penalise people if they did not improve their health, but that discounts would not be available to them.

It’s all about the data

Now MLC’s executive general manager of insurance, David Hackett has spoken about the initiative at the FST Media Future of Insurance conference held in Sydney, Australia.

He said that the biggest challenge life insurers face is in using the data properly. It’s the classic problem for organisations which are not used to having to deal with the mountains of data that new Internet of Things implementations can generate.

“We really are on an exponential progression around wearables, telemetrics, virtual reality, and we will see over the next decade dramatic advances in technology, data, and capability,” Hackett told the Sydney Morning Herald.

Wearables help you get healthy, save money

The use of wearables in the life insurance sector is not specific to Australia. It is a rising trend.

UK based insurer Vitality, which has a keen health angle to its offers that include promoting active lifestyles and sponsorship of fitness events, accepts data from Garmin, Polar, and other major fitness monitoring devices. It even offers discounts to policyholders to purchase some of the units.

Richard Purcell, head of technical marketing at Vitality told Internet of Business how this works.

“Through Active Rewards, we not only use technology to help incorporate physical activity into our members’ daily lives, but also as a mechanism to monetise their engagement and incentivise activity with immediate rewards in the form of free Starbucks coffees and cinema tickets. Vitality points can be earned for Active Rewards by exercising at a Virgin Active gym, which is discounted for Vitality members; or walking, running or cycling while using a linked activity tracking device.”

Vitality’s Nick Read is speaking at the upcoming Internet of Insurance, along with senior executives from AIG, AXA, Allianz, Google, Marsh, Startupbootcamp and Zurich. Click here for more details.