Laura Bradley, National Business Development Manager at Gallagher Bassett believes that wearable technology will have far-reaching effects for the insurance industry.
‘For the insurance industry, wearable technology will have two main effects: firstly, with more accurate data, products will now be tailored based on a customer segments’ needs, and pitched based on their risks. Secondly, pricing models will change; real-time data will allow insurance companies to increase or decrease premiums at set review points.’
‘With this new technology comes uncertainty and disruption, but also opportunity. Wearable technology will affect everything from liability, through to fraud management, through to data analytics. As a trusted partner of their clients, brokers will need to evolve to meet the continuing needs of the market.’
According to PricewaterhouseCoopers, about half of Australians sport some kind of wearable technology – more than Americans. Fitbits and other smart wristbands monitor fitness activity, such as heart rate, number of steps taken and the quality of sleep, to promote healthy behaviour and encourage exercise. This is just the tip of the wearable iceberg, with other products including smart shoes, glasses and earrings.
Wearable technology is still constantly evolving, and extends far beyond the simple wristband. Apple’s plan is to introduce Healthkit, a comprehensive well being network that collates data from a variety of sources, such as apps, clothes and even home appliances. Stored in a centralised location, this system could give a completely holistic picture of a person’s health: your fridge keeps track of your diet, your shirt monitors your heart rate, your bed determines whether you’re getting a good night sleep.
Laura says that understanding and taking advantage of wearable technology has the potential to be a real source of competitive advantage for brokers.
‘Brokers play a pivotal role in employing mitigation strategies to help their clients manage their risks. Wearable technology has the potential to revolutionise the way people monitor and manage their health, and as this technology becomes more widespread, brokers who fully understand it will be best placed to educate their clients on its use.’
‘Behavioural tracking is already widespread in the general insurance sector, particularly with the rise of telematics devices in cars. Many life and health insurance companies are also using sleep and fitness trackers to gain information, giving their customers’ discounts for good behaviour. It’s reasonable to expect that this practice will dramatically increase over the next two years.’
‘With this new technology comes uncertainty and disruption, but also opportunity. Wearable technology will affect everything from liability, through to fraud management, through to data analytics. As claims management specialists, Gallagher Bassett is very mindful of how new technologies like this affect brokers and how best to support them to take advantage of these opportunities.’