Leveraging wearables for next generation underwriting and risk stratification
Huge amounts of data have come on stream over recent decades. Has this data availability lead to better decision making?
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Overall, it is hard to believe this has been the case. Which leads to a follow up question, namely why has decision making not improved; and is there something we can do about it?
Striiv is a wearables company based in the Bay Area of California. While its products are available over all the major distribution platforms, Striiv began to alter its focus away from the physical wearable to understanding what could be done with the data it produced, particularly with reference to the healthcare sector. The first partnership they established was with pharmacy Walgreens. Medication reminders and reward points were integrated into Striiv platform, fed by the wearable. This led to a further partnership with Pfizer, developing digital therapies to work together with medication to achieve best outcomes. Striiv teamed up with United Healthcare to think about the gamification of behaviours that it could map to claims. This service has been rolled out over 40 states. The production of this wealth of data comes as pharmacies are understanding the commercialisation of healthcare. This includes minute clinics, how to deliver healthcare and looking at screening in a completely new way.
Striiv is now on its ninth generation of wearable, and inspired by companies such as FitBit, they are designed for ease of customer use and quick ability to plug and play. The sensors in the wearable include accelerometers, altimeters, optical heart rate and skin temperature. However, the amount of health relevant data we give out everyday, which could be equally of use in underwriting and claims processes, is significant. Motion, audio, sweat molecules are all relevant data points. They provide the ability to create biometric validation of cardiovascular health, mental health, and a number of other touch points. The key factor is user friction. The less friction there is between the user and the potential party they choose to share data with, with more successful the product.
Such validation could be used for relatively crude – but important – metrics, for example measuring the alcohol or tobacco consumption of an insured party. Wearables have so far largely delivered wellness metrics, such as steps taken, which can be factored into reward schemes or premium discounts by insurers. Validating other behaviours and more general physiology opens the way for products such as personalised premiums and outcomes-based reimbursements. To make it work in the healthcare space is to have an underlying return on investment, which pays for itself at scale. Working with United Healthcare, it has been possible to see a direct causality link between incentivising members and direct effects on claims.
The experience with Pfizer in delivering digital therapies taught Striiv that the best means forward is to start working with one specific drug or therapy to provide a learning curve to move onto other products. Striiv first partnered Lyrica, a pain medication, with a wearable, before moving onto XELIANZ for rheumatoid arthritis and BeneFix for haemophilia. One lesson that occurred was that younger (30-50 year old bracket) Lyrica users found adapting to wearables relatively easy, which XELIANZ users, with a median age of 72, did not. This is also of relevance from the insurance side, because most claims come from older policy holders.
The difficulty with older policy holders wearing wearables at the behest of an insurance company is that the insurance company is seen as the bad one in the equation. Therefore, Striiv focused on one particular condition, atrial fibrillation (see figure below). This irregularity in the heart beat can cause a series of micro clots that contribute to dementia. Testing AFib has hitherto been uncomfortable and expensive. Working with a medical device company, Striiv was able to measure this variable and provide a simplified report. This was great news for Pfizer, which sells anticoagulants; but less so for health insurers. However, the innovation did lead to life insurers, who were interested in the screening data, particularly when it could easily be mailed across to them. Such data helps, using predictive analytics, in claims planning.
Underwriting is more challenging, as there is an incentive to cheat. In the underwriting process, Striiv found polarization in data – either the underwriter wanted relatively easily obtainable data on one measurement; or they wanted a full medical assessment. However, Striiv could provide a middle way, a data package less than a full medical assessment, but with a number of markers, including sweat analysis for tobacco consumption.
Summary of Dave Wang's presentation at the Centre's Health monitoring event in December 2017. Dave is CEO and Co-Founder of Striiv. Summary by Simon Woodward.