The proliferation of smart watches throughout the general population has been incredibly swift. From FitBits, to Apple Watches, Garmins and Samsungs, there have never been more smartwatches available to the average consumer than there are today. That means that people have more health-related data available to aid them in their quest to be more fit, but that also means that companies have access to that data too. Let’s take a look at how fitness tracking is changing the life insurance industry.
John Hancock has been around for 156 years, making it one of the largest and oldest insurers in the United States. For decades John Hancock sold countless numbers of traditional life insurance policies. Then, in 2015 they launched a pilot for their first interactive life insurance policy program. That model was so successful that it is now being applied to their entire life coverage business.
So, what exactly is an interactive life insurance program? It means that the cost of your life insurance policy is tied to your fitness. Your fitness is measured with fitness tracking devices like Fitbits and Apple Watches. If you hit certain fitness goals, as evidenced by your fitness data, then you get discounts on your life insurance.
The great part about this shift towards interactive life insurance policies is that it’s a win win for both the insurers and the insurees. Policyholders are financially incentivised to create healthier habits, which will improve their everyday lives. Insurance companies get to collect more premiums, while paying out less claims because their customers are living longer, healthier lives.
Of course, that win-win scenario is really just a theory at this point. Even though John Hancock is an early adopter of interactive life insurance, they still have not had it enacted at a large scale for long enough to have concrete numbers. That being said, it will be really interesting to pay attention when they do.
Technology is changing our lives, and the insurance industry is no difference. Insurance has always been a data-driven business. As technology allows us to gather more data, we can expect to see insurers capitalizing on it. This space is changing every day, and is certainly one to keep an eye on.