Wearable devices can bring a massive breakthrough in the analysis of a customer’s medical conditions and lifestyle choices. Increased usage of smart wearables are encouraging the insurance companies to track the health-monitoring data recorded by these devices. With the real-time data at hand, the analysis of a person’s health status is no more dependent on the questionable accuracy and inconsistency of records presented by the diagnostic centres.
This yields benefits for the insurance ecosystem in both ways. A healthy customer can enjoy a discount of 10-15% on premiums. The insurer also avails reliable data as a base to precisely mould price points for each individual, contrary to the traditional policy of predictive risk-assessment in a one-size-fits-all way.
Wearables track real-time data of overall fitness parameters like blood pressure, blood sugar levels and heart rate of a customer. This data will largely determine the risk factor for each individual, which in turn, paves the opportunity for a custom-made premium rate.
Some have already taken the digital route to shift to an evidence-based pricing from a prediction-based policy. One insurer has an app that is integrated with the insurer's rewards program, allowing customers to earn points by the quantum of physical activities.
In the first week of December 2017, Insurance regulator IRDA formed a working group to examine innovations in insurance involving wearable devices, making it clear that wearables are not just a fancy gizmo anymore.
*Source: DNA India
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