One of the hottest topics being discussed in the protection industry is the possible move towards embracing wearable technology. One provider is already offering reduced gym memberships, as well as encouraging policy engagement through health and activity tracking. But could it change the industry and the relationship between providers and consumers?
The start of something special
These first moves towards integration may start more providers down the road of offering discounts and encouraging customers to engage with their policies. Providers are already discussing whether wearable technology has created the perfect opportunity to develop policies that are not only tailored but create a continual engagement with the consumer.
The information obtained from these devices also gives providers the opportunity to better assess risk and therefore improve the underwriting and claims processes. This could enhance the policyholder’s experience further and cut down on fraudulent claims. It is widely accepted that those who lead an active lifestyle are also less likely to make a claim.
A changing landscape
Research by PwC revealed that nearly half of those surveyed now owned some sort of wearable technology. Many people wear an activity tracker or smart device (e.g. Fitbit or iWatch), which helps monitor their health.
Hard to ignore, the protection industry has begun discussing the integration of this trend, its ramifications and possible impact on consumer engagement. Providers are treading carefully during the sector’s infancy due to consumer concerns. This is understandable, considering how the relationship between wearable technology and protection has the potential to transform the industry.
Nick Penn, our Mortgage and Protection Adviser Comments..
Nick, our Mortgage and Protection Adviser, explains that this type of Life Insurance is not for everyone. It can be an ideal fit for those who are already active or those that need an incentive to become more active.
The current schemes available can be complicated so it is important to understand what type of insurance would suit you in the long term and not just for the immediate rewards. The policy is underwritten at the point of application so the provider will take into account your activity levels when providing an annual renewal.
However, your premiums are likely to increase if you have not logged your activity with the provider and you will not have gained any of the reward points that can be exchanged through the year.
On the flip side, the more active you are, the greater potential to decrease your premiums, receive discounted health checks and a range of benefits designed to suit your lifestyle.
As a member himself, Nick has received small rewards such as family cinema tickets and Starbucks coffee to larger rewards, such as discounts on BA flights and spa days. All these rewards encourage him to keep active so that he can enjoy these perks with his family.
One Provider has different levels of activity from Bronze to Platinum, for those who meet all the criteria for the Platinum user they also receive a 1% discount on the following year’s insurance. Over a number of years this can be a significant saving, and it makes a nice change to see premiums going down instead of up!
What is in it for the Provider?
The number one reason is that a healthier client is less likely to make a claim!