Wearable technology appears set to boom among consumers in 2015 and beyond -presenting both huge commercial opportunities, but also reputational and anti-selection challenges for life and health insurers globally.
Wearable technology includes items, such as jewellery, glasses and clothing — worn on, in and around the body — incorporating sensors and other electronic technologies.
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Examples of recent devices include the Pebble smartwatch and Fitbit, Nike and Jawbone fitness tracking bands. Google already offers the Glass headgear wearable.
Meanwhile, Apple’s much anticipated Apple Watch – with health and fitness functions that will include an activity tracker and number of calories burnt – will reportedly go on sale by the end of March.
Research undertaken by Life Insurance International has found the demand for wearable technology is likely to be strong as the idea of technology tracking and monitoring health appeals to people.
According to a PwC report published in October 2014 titled The Wearable Future, approximately one in five American adults already owns some type of wearable device — on par with tablets in 2012, when the adoption rate sat at 20% after just two years in the market. Today, PwC says more than 40% of Americans own a tablet.
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By GlobalDataThe PwC report added that 70% of consumers say they would wear employer-provided wearables streaming anonymous data to a pool in exchange for a break on their insurance.
Ben Whatling, underwriting relationship manager at Aviva, says the global market in wearable technology is predicted to at least quadruple over the next 10 years and one of the largest sectors in this space will be health and fitness, so there are clear links with, and opportunities for, underwriting life and health policies.
According to Peter Hamilton, head of retail propositions at Zurich, there is little doubt that the analysis and use of data is one of the biggest opportunities the business community has to serve its customers and grow its business, and this clearly includes protection insurance.
Asked when life and health insurers are likely to use data from wearable technology data for underwriting, Hamilton expects to see plenty of trials over the next 18 months. And over the next 5 years, "it is likely to be widespread in one format or other".
Read an in-depth analysis of the future impact of wearable technology on the global life and health insurance in the January issue of Life Insurance International, which will be available to subscribers soon.
