Your Money: How health insurance can use data from wearables – The Financial Express

Clipped from: https://www.financialexpress.com/money/insurance/your-money-how-health-insurance-can-use-data-from-wearables/2254408/

This has also led to increase in demand of wearables and health apps. As per research firm IDC, the wearables market in India posted a 144.3% year-on-year growth in 2020.

If these issues are addressed, this can bring a win-win situation for policyholders as well as insurers.

By Pallavi Seth

Covid-19 pandemic has made people more aware about their health and lifestyle habits. They have started adopting better lifestyles and are paying more attention towards their health. This has also led to increase in demand of wearables and health apps. As per research firm IDC, the wearables market in India posted a 144.3% year-on-year growth in 2020.The October-December 2020 period was the biggest quarter for the wearables category in the country, maintaining triple-digit growth.

Wearables are smart devices that can be worn as external accessories, embedded in clothing and garments, implanted in the body, or even adhered to or tattooed on the skin. Health apps are application programmes that offer health-related services for smartphones. Through these devices and apps, data can be collected and sent while on the move and the information can be transferred through the internet that helps in taking right decisions.

Apple Watch is a smart device with an impressive piece of technology. Heart rate, workout monitoring, and the level of activeness per day can be measured through it. Some wearables like Fitbit trackers, MI band are in the form of a watch-style strap, which is easy to wear, and are equipped with a heart rate monitor. Apps like Google Fit, Nike Running, Healthify Me are very user friendly and economical as well.GPS and other sensors as well as inputs from the phone are used in Google Fit app to track the activities.

Use of wearables in medical insurance
Insurance companies are using wearables and health apps that give benefits like blood sugar tracker, BMI, pedometer, behavioural counselling, video/teleconsultation with doctors. External motivators like reward, monetary discounts and digital badges are being used by some insurers to incentivise customers to lead a healthier lifestyle. Insurers are giving discounts on the renewal premiums if the insured person shows healthy behaviours like number of steps per week, calorie count, healthy heart rate etc.

Insurance companies are also involving customers in wellness programmes. These Wellness Reward Programmes (WRP) aim to encourage the insured person to perform certain activities to stay active and remain medically fit.

Road ahead
When insurance companies have the real data about their customers, they can classify them in appropriate risk bands and accordingly the pricing can be done. With the correct prediction of risk, insurance companies can also predict the claims more accurately. If customers’ health data reveal some unhealthy behaviour, companies can also send red alerts to the customers and advise them to go for specific health check ups. This way, insurance companies may avoid bigger claims in the future.

Insurance companies can analyse the data of the customers and can provide innovative insurance products as per their requirements. There can be sachet insurance products with lower premiums, especially for people with lower income groups. Even though real time data is an exciting big opportunity, its uses need to be considered very carefully with high potential for fraud, high potential cost for insurers and questionable accuracy of the data. If these issues are addressed, this can bring a win-win situation for policyholders as well as insurers.

The writer is assistant professor, Amity School of Insurance Banking & Actuarial Science

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