By Linda Koco
The recent debut of the Apple Watch may be more than a heads-up for gadget-hungry technophiles who like the idea of wearable technology. Insurance carriers and rainmakers may be paying attention too.
That’s because the watch is not only a mobile device with communications, payment and other “smart” capabilities; it is also a device containing digital health and fitness monitors and apps that users can use to track personal health-related activities and data. Wearable fitness trackers already exist, but if the Apple product takes off, that might give a bounce to such tracking, and this could be of interest to insurance professionals.
For instance, could the industry find ways to use health data registered on such devices at point of sale, during underwriting or perhaps at time of claim?
One insurance executive who has been looking into wearable device use by insurers is Athene USA’s Gregory A. Bailey. In a speech at LIMRA’s recent distribution conference in Florida, the senior vice president and chief marketing officer for the annuity company said he sees “tremendous potential” for insurers in this area.
Wearable tech is one of four opportunities he urged the industry to consider. Others include mobile technology, social technology and big data. The Apple smartwatch had not yet hit the market when Bailey gave his presentation, but the points he raised about wearable tech appear to be applicable.
The “wearable” opportunity
Wearable technology may be five, 10 or 15 years away from being used in insurance, Bailey told the audience of insurance company executives. But, he added, “We’re in the long-term business, and we need to look at what the next 10 to 15 years looks like.”
Concerning health tracking devices, he noted that in addition to tracking caloric intake, exercise and other fitness markers, the devices can be used to help catch signs of disease in advance of normal routine visits to the doctor. In addition, he said, the devices can enable people to understand what’s going on with their bodies in ways they couldn’t previously.
“I think this holds tremendous potential for our industry,” he predicted. It could “change the foundational structure of how we build products, how we price products, and even how we go to market,” and also how consumers expect to interact with the industry and with their doctors.
“Truly, I believe it will be revolutionary for the industry.”
He pointed to a wearable breast cancer detection device, called an “iTBra,” from Cyrcadia Health. It can be worn inside any normal bra for a few hours. The sensors pick up heat patterns and transmit data to the physician via a smart phone.
Similar companies will be developing other innovations using wearable technology, he noted. “We have to consider: What are the implications for the insurance industry when human health changes in the future?”
Today, insurers write to get an attending physician’s statement, he noted. The response may be “a stack of paperwork sent to us, or an image sent us.”
Then he asked, “How will we react when a client says to us, ‘I want them to track my health data in real time’”?
At one point, Bailey asked the audience to indicate whether they had ever worn, or are now wearing, some type of activity tracking device. About 40 percent to 50 percent raised their hands.
More immediate opportunities
The other opportunities he discussed may have more immediate impact than wearable technology, and they may overlap. A few highlights follow:
Mobile technology: “I believe the single biggest mobile opportunity our industry has is to leverage mobile technology for the point of sale,” he said, adding it can enrich the experience that the advisor or agent has with the customer.
The sales process is full of complexity and paperwork, he pointed out, alluding to all the consumer brochures, prospectuses (if variable policies), applications, disclosures, health-related information and similar points of discussion.
But a mobile operating platform can solve for everything, he said. That includes gathering client information and recommendations on through quotes, illustrations, application, e-signature and subsequent underwriting follow-up notifications. “Maybe tablets were invented for our industry.”
Social technology: Bailey asked the obvious question: “Why is social technology a big deal when the vast majority of insurance companyiesalready have social media program?”
He said it has become “crystal clear” that the power of social media occurs where it intersects with mobile technology. It’s the two technologies combined that “will create opportunities to shape the future of customer acquisition and grow our firms,” he said. The challenge will be how to bridge the intersection.
Average Americans scroll their smartphones about 150 times a day, and check their Facebook accounts about 14 times a day, he said. That matters because, to shape the future of how consumers engage with insurance, “we have to be where our customers’ eyeballs are at. We’ve got to be in front of them, and their eyeballs are on social media, on their smartphones.”
Big data: Big data is here, he said, and insurers can use it to change the customer experience. He pointed to a development involving MyFitnessPal, a health tracking company that was recently acquired by the apparel company Under Armour.
As a result of the acquisition, Under Armour gained access to MyFitnessPal’s 80 million registered users, Bailey said. The buyer also gained access to caloric, exercise and related data.
“What if an insurance company had bought MyFitnessPal?” Bailey asked quizzically. He pondered this a bit and then asked: “What if that insurance company designed different kinds of insurance products for the community in exchange for (the users) sharing a bit of data with the insurer?”
Might the premiums go up and down depending on how the data looks, he asked.
Bailey conceded that the opportunities he outlined present “significant” compliance and regulatory concerns and other challenges and hurdles. But they also have “tremendous potential” to help shape the future of how consumers acquire insurance products and services, he maintained.
InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at firstname.lastname@example.org.
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