Where will wearable technology take underwriting?

Q. How should the insurance industry use the massive amounts of personal data made available by wearable and smartphone technology?

John Ritchie, Ellipse
John Ritchie, Ellipse

Ellipse chief executive John Ritchie

In the workplace we don’t want to track data. We don’t need data. The employer/employee relationship is loosening rather than tightening.

Staff can be given pedometers and apps to track their personal health status but the employer won’t need to see their data.

However, big global insurers are looking at what wearables can do for underwriting of high-end business, for very senior people with large amounts of cover. It is very early days but this would most likely relate to life insurance and it could also apply to cover for illness.

The driver for this activity is not from Europe but from the emerging economies in the East. If you look at the rates of type 2 diabetes among the middle classes in India, China and other countries in the region, the risks are huge. So the imperative is to create a way of being able to address that risk.

Acceptance of wearables is both an age and a cultural thing. Older people in Europe aren’t so amenable to them but the young are and, in the new emerging economies, people are more tech-heavy. It is early days but we could see personal data becoming a
pre-condition of certain policies.

Ron Wheatcroft

Swiss Re technical director Ron Wheatcroft

Our research shows that we are among the least digitally averse countries in the world. But a survey we carried out revealed that 42 per cent of Britons are unwilling to share personal data on an ongoing basis in order to create an individual and tailored life or health insurance policy.

It found 61 per cent are not willing to share data through a smartphone app, and sharing through social media such as Facebook is even less appealing, with this regarded as an area of fun rather than for financial services.

The inference in the question is that you would get a better deal. I can see it fitting well in a Vitality model, for the individual market, but for an employer scheme it would feel a touch Big Brother-ish.

Sharing data for a workplace arrangement would be a whole bigger step. If an employee thought something was going to come up that showed they were not living a good life, they would be concerned about what their employer would think about that.

Paul Avis, Canada Life
Paul Avis, Canada Life

Canada Life Group Insurance marketing director Paul Avis

There is a debate to be had about the extent to which the employer can invade the private life of the employee. But if employers want to offer their staff wearable technology, they should seek only aggregated data across the whole population rather than individual records.

We were offered a claims application by a software provider which, if the individual clicked ‘accept’, would allow us access to their Facebook page as a friend, their browser history and their GPS findafone data, with the idea that this would enable us to validate our claims more thoroughly.

This effectively means if someone was off sick supposedly with a bad back, we would be able to tell if they were going to the gym three times a week.

But we thought this was too intrusive. It is not treating customers fairly and we are completely comfortable with our claims-processing structures.

This is one of a number of debates, along with the issue of the ABI code of practice around genetic tests, where the industry must proceed in a sensitive way.