In May 2018, I presented a session entitled “Embedding Wearable Health Tech Into Insurance” at the Society of Actuaries in Ireland’s Annual Convention.
The session explored the potential for physical activity trackers and other wearable health technologies to become embedded into the insurance industry over time. It drew on evidence of the effectiveness of wearables to consider the potential uses of this technology by insurers over the short-term, medium-term and long-term.
- Insurers could encourage policyholders to use wearable devices to help quantify the relationship between wearable health measurements and risk of developing certain diseases.
- To improve accuracy and validity of measurements, there may need to be increased uptake of medical grade wearables.
- There may be the opportunity for insurers to use a wide-range of health-related variables from wearables to help set premiums more in line with risk.
- This is likely to be balanced by risk smoothing policies. Policy-makers may aim to ensure that the less healthy and those who choose not to share their data with insurers are not priced out of the insurance market.
- There may be the opportunity to use wearables to bring about behavioural change, but evidence so far is inconclusive.
- Collaboration between insurers and other stakeholders such as health professionals, IT developers and policymakers may be needed to try to encourage healthier behaviours among users of wearable health tech. If effective, this could help to reduce the societal disease burden.
Overall, there may be an opportunity for actuaries to be involved in embedding wearable health tech into the insurance industry and the wider society. Actuaries could help to implement a data-driven approach to the use of wearables that encourages long-term behavioural change and thereby improves health.