Technology hasn’t just infiltrated our work and personal lives, it’s also insinuated itself onto our bodies. Wearable technologies such as the Fitbit and Apple Watch have the power to measure our health and activity level, track our movements, remind us of appointments, take dictation and update us on current events. These devices are becoming so popular Insurance Journal reports that 20 percent of Americans are currently using them.
With wearable technologies poised to become ubiquitous in our society, we have to consider what kind of effect they have on insurance.
Integrating wearables in the application, underwriting and claims process can help insurers improve their customer service and bottom line in many different ways. Let’s look at a few of them:
- Data obtained from wearable technologies can provide more accurate health, driving and activity information for applicants, allowing insurers to minimize risks and create more accurate quotes.
- Companies that provide their employees with wearable technology can improve training and safety while increasing productivity—all of which may lower insurance rates.
- Wearables can help ensure more accurate claims assessment and quicker claim processing.
- When used properly, wearables can provide services (such as directions, traffic reports and weather alerts) that allow policyholders to stay safe and reduce the likelihood of accidents and injuries.
- Wearables can help confirm the validity of various claims including those for personal injuries and worker’s compensation.
- Some wearables, such as Google Glass, may help insurance adjusters and agents quickly, easily and more accurately establish assets and damages for their clients.
- By offering premium incentives for healthier activities and eating as tracked by a wearable, insurers could significantly increase their market share.
There’s a strong case to be made for the benefits of wearables, but that doesn’t mean there are no concerns or drawbacks. Here are five that every insurer should consider:
- Certain wearable technologies introduce privacy concerns that may increase liabilities for companies issuing them to employees.
- Wearables convey a lot of information to the user and that can be distracting, which may result in more accidents and injuries.
- Wearable technology isn’t perfect and there could be some dispute about the accuracy of its reporting.
- Some individuals may find a way to game the wearable’s data, resulting in undeserved lower rates.
- The data collected by wearables can fall prey to hacking and other security risks.
Wearables are a new reality we must integrate into our processes and standards. Companies that take time to examine the downsides of these new technologies will be better positioned to utilize them strategically and safely. And while industry standards may need some time to catch up, using wearable technology to keep customers safe, healthier and potentially reduce insurance pay-outs and premiums can result in a win-win for everyone.
What long-term affects do you think wearable technology will have on the insurance industry?