Insurance-Wearable Series Volume 1: How wearable technology is reshaping the future of insurance
We’re excited to introduce our Wearable Series, where we explore how wearable technology is reshaping the insurance industry. As these devices become more popular, they’re paving the way for personalized policies, enhanced risk assessments, and a healthier future for all.
What is wearable data?
Wearable data refers to the information collected by electronic devices worn on the body. These gadgets monitor everything from heart rate to sleep patterns and stress levels. For insurers, this data offers a clearer, real-time picture of a person’s health, enabling more personalized policies, better risk assessments, and, ultimately, healthier outcomes for policyholders.
How wearable data is transforming the insurance industry
Wearable technology has become more than just a trend; it’s a powerful tool that offers a broad range of health data with immense value to the insurance industry. By collecting real-time insights about a person's health and behavior, wearables enable insurers to assess risk more accurately, encourage healthy behaviors, and tailor their products to individual needs. Here are some of the key types of data wearables collect and how they are reshaping the insurance landscape.
Key types of data collected by wearables
Sleep patterns:
Wearables track sleep duration, quality, and cycles (such as deep sleep and REM). This data is critical for assessing sleep health, which is closely tied to overall well-being. Poor sleep can be linked to conditions like obesity and diabetes, making this information valuable for insurers in evaluating long-term health risks.
Respiratory rate:
This metric measures the number of breaths a person takes per minute. Abnormal respiratory rates can indicate underlying health issues such as respiratory infections or chronic conditions. Monitoring these patterns allows insurers to better assess the risk of respiratory-related illnesses.
Blood oxygen levels (SpO2):
Advanced wearables can monitor oxygen saturation in the blood. This data helps detect respiratory problems, such as sleep apnea or lung issues, offering valuable insights for insurers to assess potential health risks.
Stress levels:
Wearables use heart rate variability and other indicators to estimate stress levels. Chronic stress is a known risk factor for mental health issues and other conditions like heart disease. Insurers can use this data to predict potential health risks and encourage stress-reduction behaviors.
Caloric intake and nutrition tracking:
Many wearables sync with nutrition apps to monitor food intake, calories, and hydration. This data helps insurers understand diet-related health risks, such as those linked to obesity, diabetes, and cardiovascular health.
Location and movement data:
GPS data from wearables can track driving behaviors, such as speed, braking patterns, and time of day driving. This data is especially useful for auto insurers to assess driving risks, helping them offer usage-based insurance policies or reward safe driving habits.
Posture and musculoskeletal health:
Some wearables provide insights into posture and ergonomics, allowing users to address sedentary behaviors or incorrect posture. Insurers can use this data to assess risks related to musculoskeletal disorders, such as back problems or repetitive stress injuries.
Blood pressure monitoring:
Wearables that monitor blood pressure provide crucial data for evaluating risks related to hypertension and heart disease. This allows insurers to better assess cardiovascular health risks and offer personalized policies.
Glucose monitoring:
Emerging wearables that offer continuous glucose monitoring are particularly beneficial for managing diabetes. Insurers can use this data to monitor long-term health risks related to blood sugar control, providing tailored health recommendations to policyholders.
How wearable data benefits insurers and policyholders
Wearable data provides a win-win scenario for both insurers and policyholders:
For insurers:
Wearables give insurers a clearer, real-time picture of a policyholder’s health and lifestyle. With access to this data, insurers can assess risks more accurately, leading to smarter underwriting and pricing models. For example, a client with consistently healthy sleep patterns and low stress levels might qualify for lower premiums. Insurers can also use this data to detect early warning signs of health issues, enabling proactive interventions that prevent larger claims down the road.For policyholders:
Wearable data empowers policyholders with personalized health insights that can help them stay healthy. Policyholders who maintain healthy behaviors are rewarded with lower premiums, creating an incentive to stay active and monitor their health closely. Additionally, personalized health tips based on real-time data can lead to early detection of potential issues, improving overall health outcomes and reducing long-term medical costs.
Wearable data is a game-changer for the insurance industry
The introduction of wearable data has transformed how insurers assess risk and engage with policyholders. By providing detailed health information, wearables enable insurers to offer more personalized, data-driven policies that reward healthy behaviors while reducing overall risk. For policyholders, these devices not only provide insights into their well-being but also offer the potential for lower premiums and better health management tools.
In short, wearable data is reshaping the future of insurance. It offers the information insurers need to make smarter, more accurate decisions, and it provides policyholders with the motivation and tools to lead healthier, more active lives.
As wearable technology continues to evolve, its role in the insurance industry will only grow, creating a healthier and more proactive insurance ecosystem for everyone.
Wearable usage: Global and U.S. penetration
The use of wearables is skyrocketing worldwide:
Globally: Wearable device shipments reached 533 million units in 2021 and are projected to hit 776 million by 2024.
In the U.S.: One in three Americans now owns a wearable device, with roughly 110 million users, a number that continues to rise.
Across different regions:
Europe: Growth is driven by health and wellness trends.
Asia: Adoption is fueled by tech-savvy populations and affordable devices.
U.S.: High penetration, supported by advanced healthcare systems and consumer demand for health tech.
How wearable data is transforming the insurance industry
Hi RookStar,
I hope this message finds you well. We’re excited to introduce our Wearable Series, where we explore how wearable technology is reshaping the insurance industry. As these devices become more popular, they’re paving the way for personalized policies, enhanced risk assessments, and a healthier future for all.
Introduction to wearable data
Imagine your watch knowing more about your health than your doctor. It sounds like science fiction, but wearable data is already changing the insurance industry. The tiny devices we wear every day—smartwatches, fitness trackers, and even smart rings—are packed with sensors that collect valuable health information. And it’s not just about counting steps. This data can help save lives and revolutionize insurance.
What is wearable data?
Wearable data refers to the information collected by electronic devices worn on the body. These gadgets monitor everything from heart rate to sleep patterns and stress levels. For insurers, this data offers a clearer, real-time picture of a person’s health, enabling more personalized policies, better risk assessments, and, ultimately, healthier outcomes for policyholders.
Types of data collected for the insurance industry
Wearables provide a wealth of data that can be extremely useful for the insurance industry. Some key metrics include:
Sleep patterns: Sleep duration, quality, and cycles (e.g., deep sleep, REM) can indicate overall health and potential risk factors for conditions like obesity and diabetes.
Respiratory rate: Tracks breaths per minute, useful in identifying health issues like respiratory infections.
Blood oxygen levels (SpO2): Detects potential respiratory issues, valuable for identifying risks like sleep apnea.
Stress levels: Using heart rate variability to gauge stress, helping to assess mental health risks.
Blood pressure: Measures risks associated with heart disease and hypertension.
Glucose levels: Continuous glucose monitoring is especially helpful in managing diabetes.
Location and movement data: GPS tracking provides insights for auto insurers by assessing driving behavior.
For insurers, this data allows for better risk assessment and early interventions, ultimately leading to lower premiums for policyholders who maintain healthy behaviors.
Wearable usage: Global and U.S. penetration
The use of wearables is skyrocketing worldwide:
Globally: Wearable device shipments reached 533 million units in 2021 and are projected to hit 776 million by 2024.
In the U.S.: One in three Americans now owns a wearable device, with roughly 110 million users, a number that continues to rise.
Across different regions:
Europe: Growth is driven by health and wellness trends.
Asia: Adoption is fueled by tech-savvy populations and affordable devices.
U.S.: High penetration, supported by advanced healthcare systems and consumer demand for health tech.
Impact on the insurance industry
Wearables are transforming the insurance industry by offering several key benefits:
Improved risk assessment: Real-time health data refines risk models for personalized products.
Faster underwriting: Wearable data speeds up underwriting by providing instant health metrics.
Customer engagement: Insurers can engage with customers, encouraging healthier habits through rewards programs.
Personalized plans: Wearable data enables custom health plans and more accurate premium pricing.
However, challenges around data privacy, regulation, and access to technology must be addressed to ensure responsible use.
Future trends for wearables in the insurance industry
Looking ahead, wearables will continue to evolve and impact insurance in new ways:
Personalized policies: Insurance plans tailored to daily health metrics will become the norm, rewarding healthy behaviors with lower premiums.
Real-time risk assessment: Insurers could soon adjust coverage based on real-time health data, such as detecting irregular heartbeats.
Mental health tracking: Wearables may soon monitor mental well-being, providing insurers with even more comprehensive health profiles.
Environmental exposure data: Future devices could measure exposure to pollution or UV rays, refining risk assessments based on environmental factors.
Wearables will enable insurers to shift from reactive to proactive health management, reducing claims and promoting healthier lifestyles.
FDA approval of wearable devices
For wearables to be used as medical devices, they must undergo the FDA’s rigorous approval process, ensuring they are safe and effective. Many wearables now offer features like ECG monitoring and stress tracking, with FDA approval lending credibility to the data. This is crucial for insurers, who rely on accurate, reliable data for personalized plans and premium calculations.
Everything becomes wearable
Wearables aren’t limited to smartwatches and fitness trackers anymore. Devices like smartphones, earbuds, and smart glasses are being integrated into the health ecosystem, tracking everything from heart rate to stress levels and even eye health. These emerging wearables open up new possibilities for insurance:
Personalized policies: Insurers can offer plans based on a broader set of health data.
Risk assessment: Real-time data provides more accurate risk profiles.
Claims processing: Wearable data can validate claims more quickly and accurately.
Conclusion
Wearables are transforming the insurance industry, offering more personalized policies, improved risk assessments, and greater customer engagement. As technology advances and new data types become available, insurers will continue to innovate, creating a more proactive and responsive health ecosystem.
Stay tuned for our Wearable Series Vol. 2, where we’ll dive deeper into how these innovations are shaping the future of insurance!
