The Integration of Wearables and Insurance

Wearables are already used in the value chain of some insurers to encourage general fitness. Future wearables will feature medical-grade technology and personalised health advice with targeted interventions.

Wearables: The current generation

As of the end of 2016, Fitbit had sold 60 million of its products[1]. FitBit is just one player in a crowded market, seeking to set health and fitness goals for many millions of users. Although the initial enthusiasm for many devices may fade, and they may end up in a cupboard, they have made a substantial cultural impact. We are all increasingly aware of the need to be active and to achieve at least the "recognised" 10,000 step daily benchmark.

Source: IDTechEx 2016

Fitbit and similar devices remain at consumer grade. They measure physical activity – and while everyone may agree, physical activity is a good thing, 10,000 steps is in no way a scientific measure. It could be that individuals need specific targets based on their physical attributes to improve their health benefits. The next challenge for wearables is to give more personalised advice based on more granular data of vital medical signs.

Consumer-grade devices are limited in what they measure. Medical-grade sensors measure multiple vital signs with enhanced medical efficacy. Source: Biovotion

The success of consumer devices has not passed producers of medical-grade measurement devices unnoticed. They are seeking to take their devices out of clinical settings and into domestic use. One example of this is a pilot being done on cardiovascular patients who have been given the medical grade device, following their medical procedure. The patients return home and the device measures their vital signs and feedbacks to the doctor. If the vital signs show any abnormalities, it enables instant intervention and treatment.

Medical grade wearables: The next generation

The revenue growth projections of medical-grade devices suggest that these will play an increasingly pivotal role in consumer health.

Source: IDTechEx 2016

Medical-grade sensor market is growing with a large focus on key impairments such as diabetes. The big players in this space such as Roche, Dexcom, and Abbott are increasingly commercialising wearable continous glucose monitoring and insulin pump systems with some impressive results.

One of the examples of a medical device company moving into the consumer space is Swiss producer Biovotion, in whom Swiss Re has a strategic shareholding. Biovotion has brought to market a system that brings together a specialized knowledge of tracking medical vital signs with an ease of use to appeal to consumers. Ergonomic and able to cope with motion, the Biovotion wearable is discrete and wirelessly connected. It currently covers various vital signs – heart rate, blood oxygenation, skin temperature, skin/blood perfusion and steps/motion. A number of future parameters will be added, most notably blood glucose levels.

The downloaded results from Biovotion form an easy-to-understand circular chart. It makes users aware of their sleep patterns, of the effects of food and drink, of stress levels and of exercise. It provides a personalised report on how individuals can moderate their behaviour to influence their overall health outlook. It takes users beyond generic goals to a nuanced picture of their daily behaviour and its effects on their fitness and well-being.

Insurance and wearables

For many years, insurers have offered wellness propositions embedded into life and health insurance products. In return for downloading their physical activity data, as well as lifestyle and other forms of data, consumers can enjoy discounts or rewards at partner organisations. Policyholder engagement and the retention value of these products have been certainly impressive. However, the jury is still out as to whether they sufficiently stimulate tangible health gains among the wider population; or whether they primarily prove attractive just to those with a predisposition to be fit and healthy.

Various insurers offer incentives and premium discounts for consumer grade wearables devices:

There is an underlying assumption that the healthy and fit are generally good risks. However, it is not clear how scientific the data and pricing models are that underlie these discount schemes. Improved data will provide the basis for a more structured approach for discount schemes. To this end, a medical-grade device will provide a better understanding of an individual's health and the correlations between the health readings and the impact on mortality or morbidity.

There are a number of companies seeking to create more accurate models and build correlations between wearable data and health outcomes. These include, for example, going beyond traditional underwriting criteria to build in data sets from wearable devices. These models have shown linkages between health information provided by wearables and health outcomes linked to heart disease, depression, mortality, diabetes among others. More work needs to be done, but momentum is palpable.

Traditional variables       

New variables looking at wearable data

Age

Age

Gender

Gender

BMI

BMI

Blood tests

Waist size

Blood pressure

Resting heart rate

Tobacco

Alcohol

Family history

7 days wearable data (steps per day, minutes of moderate vigorous activity/sleep)

Table showing new variables using wearable data as a predictor for health.

These models have shown linkages between health information provided by wearables and health outcomes linked to heart disease, depression, mortality, diabetes among others. More work needs to be done, but momentum is palpable.

Apps, monitoring, behaviour and insurance

It is not only dedicated wearable devices, which are a source of monitoring health indicators. Smart phones are increasingly being used as a health device. There are currently estimated to be 170,000 apps in circulation to help manage health conditions or overall health. The majority will not provide useful data; however some, as proven by randomised control trials, can be of benefit in health improvement.

Swiss Re has been working in this space and we are finding interesting and exciting potential partners. There are some very engaging platforms in circulation, providing tangible support for conditions in need of constant management, such as mental health, return to work, obesity and diabetes. Effective apps and technology have the ability to reach wide populations at low cost with highly effective results on health management and with significant impact on mortality and morbidity. To demonstrate the power of these apps, one partner Swiss Re is working with recently shared that their mental health and depression app that uses AI and chat bot techniques, has saved two people from suicide. 

Conclusion

Established wellness insurance models have focused on policyholder engagement. As insurers look to develop more sophisticated models and use medical-grade devices as well as sophisticated apps, we would expect to see moves towards a more personalised health proposition and the ability of the insurers to better understand:

  • Disease progression prediction
  • Earlier disease intervention and management
  • New ways to underwrite where wearable data plays a role 
  • Personalised premiums whether that be impaired lives or preferred lives
  • Increasing use of lifecycle premium changes, as data emerges from an individual's wearable device, showing changes in their health status

Insurers will increasingly seek to build more detailed feedback loops of health and wellbeing which go beyond general fitness. Over time, those insurers that truly differentiate and add value will be those who use apps and wearables in intelligent ways to better risk select and offer game changing health insights and improvements.

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