The future looks wearable - a break down from FST’s Future of Insurance Conference

At the FST Future of Insurance Conference a couple weeks ago, it was clear what was on everybody’s mind. Overwhelmingly, the topics of the day focused on two things: data and wearables.

Our Future of Insurance survey showed that the topics were definitely relevant; 30.8% of insurers think wearables will have the biggest impact on insurance in the next few years, well above any other new technology:


In light of this interest, we’re going to take a look at how the internet of things, specifically wearables have already made a dent in insurance, and how they’ll continue shape the future of life and health.

The terms wearable tech, wearables and the internet of things, for those who have been hiding under a non-wifi-compatible rock, refers to items like watches and armbands that are embedded with electronics, software, sensors, and network connectivity in order to collect and exchange data.

When it comes to insurance, the theory is simple. Healthier policyholders are better for the bottom line, so encouraging healthy behavior is worth an investment. A number of insurers across America, and even more globally, have developed programmes that combine wearables with rewards schemes to encourage better living. All current wearable programmes in insurance seem to follow one of two basic formulas:

1. Rewards - Example: Oscar Health insurance

We featured Oscar in our last post about insurers using data to provide niche products, and once again the tech-centric health insurer is relevant. Oscar partnered with wearable provider Misfit to provide monetary rewards to its policyholders, claiming they can “earn up to $1 a day for reaching personalized daily step goals.” There are slight variations to this theme with some insurers offering coupons or prizes.

2. Lower premiums - Example: John Hancock

John Hancock is another provider featured in our data blog but this time for providing lower life insurance premiums for using a Fitbit. The amount and requirements for using a wearable device to earn lower premiums varies but the concept doesn’t yet vary greatly.

Basic rewards schemes are just the beginning. If the early adopters in insurance are already offering wearable-centric products, then it’s already time so start thinking about what’s next.

Well, first of all, wearables will be a lot more prevalent. Reinsurance giant Swiss Re believes that it will be impossible to get life cover without a wearable device within the next 10 years.

The technology used in wearables will grow more sophisticated. With “ingestibles” and “embeddables” on the horizon, sensors that collect data from within our bodies could provide a wealth of new information. The biometrics gathered from these devices will be able to alert wearers and their insurers of potential health risks and problems as they crop up.

As we collect more data, our ability to process those metrics into usable information will be forced to improve as well. Better data management is going to be essential, and also one of the biggest challenges for insurers.

Of course, there are many more pitfalls to navigate while integrating wearables into insurance. Next week we’ll take a look at the biggest hazards and how to avoid them.