In the life-health sector, the Internet of Things (IoT) and wearable technology will provide more information, better insights, improved efficacy and preferable outcomes in consumers’ overall health and life expectancy.
The data wearable devices provide will enable insurers to more accurately assess a client’s health and lifestyle, which will in turn enable them to more accurately segment and price insurance products.
As insurance companies weigh the benefits of the IoT in personal and commercial lines, some have already developed IoT-supported policies in the life-health space.
For example, a dental insurer may provide policyholders with an IoT-enabled toothbrush, then offer policy discounts based upon brushing frequency and duration.
Or, a life insurance company may underwrite a prospect with standard mortality tables supplemented by data from the prospect’s biosensor or activity tracker, if available. Once the policy is issued, the policyholder downloads the insurer’s mobile app and connects it to their activity tracker. The carrier tracks the policyholder’s exercise and health data while analytical tools run against individual and aggregated policyholders, identifying trends and anomalies.
This information enables the insurance company to make policyholder-specific recommendations and communicate them back to the insured via the mobile app, as well as provide changing goals and offer incentives for appropriate performance.
Thanks to the IoT, agents will be able to offer more competitively priced options to their prospects and clients, but will need to educate themselves on the new underwriting and pricing methods in order to adequately explain them. Additionally, agents may need to actively seek out IoT-enabled insurance products to provide options when savvy customers request them.
The IoT will also have a positive impact on claims in both health and life policies. The ability to detect symptoms early will provide carriers with opportunities to mitigate or eliminate health crises, and rapid delivery of pertinent historical health information at time of loss will provide for better diagnosis and treatment. Case management will improve after events due to frequent monitoring of vital signs.
Although agents and brokers aren’t normally involved in the claims process, the additional claims information from biometric sensors will impact renewal negotiations and pricing.
Consumers, meanwhile, will benefit by saving money on their insurance premium while simultaneously improving their health. In particular, gamification will encourage healthy behaviors, which reduce adverse health issues and promote long life.
Overall, both the insurance industry and consumers stand to dramatically benefit from IoT-enabled life-health products.
Ron Berg is executive director of the Agents Council for Technology (ACT). This article is adapted from ACT’s free IoT e-book. View all of ACT’s IoT resources online.