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21 Aug 14 08:41

This could be our reality in the next 5 to 10 years. If you do not have a wearable device that tracks your health then you will find it nearly impossible to buy life insurance. If not in the next 5 to 10 years then I am convinced we will see this implemented within the next 20 years. How can I make such an outrageous claim?

That's easy. The event of Big Data will bring about a revolution in customer experience similar to what we have seen in communications and planning. This customer experience will develop significantly and while it will make the process easier for the customer, it will allow insurers to get even more details than ever before. Let's look at what happened to the communication industry. We started of painting stuff on rocks, then paper, the writing on paper, then printing on paper, then typing on PCs and drawing on PCs. Similarly, we used smoke signals, the birds, then Morse code, then radio, then land line and then mobile.

Nowadays, if you want to communicate with anyone you assume that you can either reach them by phone, mobile or email. If you cannot then that is a complete outlier and would struggle to really engage with customers or society in general. If you think about it, we were just forced to evolve with the market and what it offered. In many ways, things are less secure, we have less privacy, etc. yet everyone has basically migrated to these new technologies.

The potential that Big Data holds for the customer experience when they buy life insurance is immense and because of this I believe we will see a big shift in customer engagement. If a company embraces the data side of the business and the value it brings then it will need to do so wholeheartedly. It won't work just to say "Just give me the data you have and we'll see what we can do with it.". It leads to bad quality and low quantity data, bad conclusions and reduced improvements or value creation.

Imagine you can get someone's medical info, activity data, food intake info and health plans in a matter of milliseconds. Not only will this be incredibly convenient to the client who will not need to answer these questions but the enhanced value insurers could offer is vast. These could include significant premium discounts, insurance to people previously considered uninsurable, claim pay-out guarantees (because there is no non-disclosure),comprehensive cover that is available immediately, quicker claims decisions,etc.

Join me at webinar on 15 September (CLICK HERE below for more info) or at the "Analytics for Insurance Europe" conference in London ( where we touch on some more of these potential uses for data and how it will fundamentally change the customer experience around buying a life insurance policy in the future. We will also touch on how this even applies to people who have serious data privacy concerns.

Analytics for Insurance Europe 2014

How to put advanced analytics at the centre of your insurance business and increase efficiencies across marketing, pricing, claims and underwriting

Category: Other

Location: London, United Kingdom


Daniel Martin Eckhart - 22 Aug 2014, 7:21 a.m.

Yep, I'm entirely with you on this. The near future will be just that - you want coverage? You put your live data into the bargain. It'll be a massive shift and it'll happen because, yes, it's happened before. Consumers will move into this agreements because of ease of use, better deals and better solutions.

I'll try to make the webinar!

Rashunda Tramble - 22 Aug 2014, 9:54 a.m.

So for me to receive life insurance, I would have to agree to wear a device. I'm uncomfortable with that. If this were a choice, such as deals in which one can install a monitoring device on their car to receive a lower auto insurance premium, I wouldn't have an issue. But to make it mandatory would definitely scare me away. As a matter of fact, this would be a great opportunity for insurance companies who don't push monitoring devices to gain new customers: "Do you live a healthy lifestyle? Do you get checked by your doctor once a year? Just bring us that file and we'll help you. No devices needed. We trust you." I would sign up in a heartbeat.

Oliver Werneyer - 22 Aug 2014, 11:29 a.m.

@Rashuna. I am sure you are not the only one. I would even argue that most people, at this moment, have the same issues with this as you do. The thing is though that you might not have much choice in the future. There will be insurers who will let you answer questions and "trust" you but in 10 years or so this might be considered a niche market, maybe 5% of the market. And that is fine. But most people plus operational efficiency will probably drive a move into this more digitally-optimal space. The kids born today will grow up in this digital age and having their vitals monitored and shared won't be weird or concerning to them at all.

Melissa Leitner - 22 Aug 2014, 11:47 a.m.

In motor insurance, there are some markets where having a vehicle-tracking/anti-theft device in cars above a certain value is mandatory for insurance purposes. So this is an interesting precedent to compare to...

I think what Oliver discusses could happen as soon as there is a big enough group of consumers who are comfortable with the concept. (Maybe we're there already?!) It doesn't need everyone to embrace new technology, just a sufficiently large group who recognise that it gives them a better product with additional services, advice, support to meet lifestyle goals etc, and a better price. If this carves out a consumer group with better experience, then the rest are likely to follow eventually, or swallow higher prices in their own (worse) risk pool... Ultimately, this is better risk selection in practice, combined with behaviour monitoring and improving tools.

I'll sign up :-)

Rashunda Tramble - 22 Aug 2014, 12:12 p.m.

I think making consumers comfortable with the idea is important. But cultural nuances should also be taken into account. I would think in some markets, the option (again, *option*) to wear a device in return for lower premiums would work. But in others, unless there is a pretty gosh darned huge discount or other value proposition, I'm not sure how many people would sign up (due to regional history, politics, etc). We touched on cultural nuances in insurance marketing a while back (I'll try to find the post). Now, if I had the choice and, perhaps, if there were set times I had to wear the device - maybe at the start of the policy for a 1-month period for benchmarking, I would consider it.

Johan Weijer - 22 Aug 2014, 2:11 p.m.

Oliver, I agree with you that this could be the future. I find the time schedule a bit narrow, but that is not that important to me. I think that having access to all this information will have a downside for both insurance company and insured.

Why would I buy life insurance “knowing” that I am not going to die soon? I am convinced that people will believe that because their app or device says so.For those people rates will go down. For people that have “hidden defects” that are discovered with these new techniques the downside will be that they are more difficult to insure.

I think changes are quite big that this in the end will create unbalance in a portfolio. Ending with two groups of people, one who don’t need it and one that can’t afford it. But having said that, developments in this field will not be stopped, so we just end up with having to deal with it.

I am a property underwriter and not a native English speaker so my choice of words may be a bit odd perhaps for which I apologize. But I find this interesting matter.

Rashunda Tramble - 23 Aug 2014, 9:04 p.m.

You brought up some very good points. And your English is fine!

Regina Berens - 23 Aug 2014, 11:12 p.m.

I own two of these wearable devices; I just used one to track my 16-mile bike ride. So yes, I am comfortable with them in the sense that I wear them and use the information they provide. In my last job, if we wanted to get points in the Employee Wellness Program for workouts (and you got discounts on health insurance after a certain point level), your workouts had to be recorded by one of these devices and uploaded. Today, I found that one of the device vendors, FitBit, "says it will no longer sell data that can identify an individual unless the individual has given permission first." I wonder if my previous employer was aware of that.

I'd want privacy laws in the US to be closer to those in the EU before the use of data from wearable devices were made accessible to insurers.

Alicia Montoya - 25 Aug 2014, 11:48 a.m.

Fascinating topic and discussion! From where I stand, I think the devil's in the details.

While I absolutely love eHealth and how it empowers individuals to take care of themselves (and all studies show outstanding results in that respect), I don't see why ALL that data needs to be shared with my insurer / doctor / government / Google / Facebook / Nike / etc etc etc.

The way I see it, I agree with Rashunda that this should be an option, and one which may make sense in some countries more than in others. Looks like, for now, companies are introducing it as an option with discounts for employees who use it:

And I agree with Regina that I should have total control over my data. We should define what insurers need to know (e.g. monthly stats on my driving, exercise..) and what they don't need to know (e.g. where I went, with whom, when, personal health details, etc). No company or government should hold this data about me. It should only be available to me (so that I can track my behavior and improve on it) and whomever I choose to share specific parts of it with.

Of course I see the benefits of big data being used wisely and ethically to better price our risk and design our cities and healthcare systems. But do I trust the data to be treated that way by all interested parties? Not unless there are strict privacy laws in place and I have full control over who gets what data, when.

Oliver Werneyer - 25 Aug 2014, 1:38 p.m.

Johan, you make some very good points. I do think that a lot of these points apply to the current mindset and attitudes towards data. You and me still think about this and are very protective about it. We come from a time privacy and some of the data companies want us to share is just weird. But, think of the next generation. The kids now aged 6 and younger will have mobile apps, data sharing, location sharing, etc. as part of standard life transaction. This will not be weird for the next generation.

With more "informed" customers also come so many more risks. People who know they lead bad lifestyles might choose insurers who don't use this data o make a decision. They end up with all the bad lives and possibly horrible experience (if they don't charge appropriately). They will have to adapt and might make the move to requiring that data eventually.

One other thing, just using the data to make decisions will lead to the problems you started, I agree. The thing is though that it should come with new ways of interacting, products, rewards, etc. with one of the most fundamental changes being with health management rather selection. So, users should have the opportunity to get their premiums reduced or benefits enhanced if they improve their lifestyle. Not just be judged at outset and stuck with that decision.

Oliver Werneyer - 25 Aug 2014, 1:43 p.m.

The data privacy issue is central to it's success. I believe that the model should be built on the foundations of a user submitted/permitted basis, not an acquisition basis. This would be done through APIs.

Imagine you apply for a policy and you have chosen all your benefits. It then says "Please submit your activity data. What device/service do you use?" and you select FitBit". It then loads the FitBit API (i.e. a mini FitBit webpage) and you enter your FitBit username and password (after seeing the data they will use/copy). It's similar to signing up to a service using your Facebook or LinkedIn account. The provider cannot store your username and password because essentially this happens on a FitBit mini-page. They then transfer that data to the provider (seeing that you gave express permission). There should be no other way to get that data while it identifies you.

Companies like FitBit should still be able to sell their data (anonymised) for research purposes though.

Regina Berens - 26 Aug 2014, 1:02 p.m.

Even though I'm an actuary, I see too much "noise" with this data. I upload workout data from my device. Was it 1.5 hours in an air-conditioned gym under the supervision of a personal trainer? Or was it 1.5 hours of bicycling out on the roads in 100-degree heat, surrounded by exhaust from motor vehicles? In my case, it was the latter. Did I wear sunscreen? (Yes.) Was I under the influence of mind-altering substances? (No.) Was I ignoring any symptoms of heart problems, like my uncle the marathon runner, who trained diligently till he dropped dead from a heart attack at age 42? (No.)

Are we going to add a tiny video camera, air-quality control devices and more invasive monitoring?

My previous employer also compared the health insurance costs of "engaged" (those who had accumulated a minimum number of points via workouts, taking on-line courses on nutrition and other topics, stopping smoking or losing weight if needed, taking a cardiac step test, etc.) vs. those who were not engaged. Not surprisingly, the results were better for the engaged group. The question they didn't answer was whether people who were already health-conscious and had no chronic problems were more likely to work towards "engaged" status in the first place. It would have been far more complicated to compare results for groups with similar characteristics (age, gender, body mass, physical activity) for those engaged or not engaged, but that's what's needed.

Oliver Werneyer - 27 Aug 2014, 11:35 a.m.

Regina, I hear your concern and I share it to the extent that I would want to avoid spurious accuracy and ludicrous setups. The trick will not be to use every single little data point that is available but rather now trying to figure out what the right variables are to track and figure out what the new proxies are that we could have access to now. What is built around that in terms of engagement would be for customer engagement purposes rather then data-for-pricing purposes.

The challenge is that we just don't know and understand these new data yet and that is where we find ourselves at the moment really. I do think that a lot of this is happening to move the "engagement" and data-value not just post-issue but to the pre-issue-of-policy processes.

Johan Weijer - 27 Aug 2014, 3:16 p.m.

Oliver, I fully agree with you. They new generations will handle their privacy in a completely different way than we are used to. Partly I join in that process too. My perspective is what I find important in privacy is changing.

I know that you guy’s at SwissRe experimented with the Fitbit. At our company we also pay attention to live stile although not with such sophisticated devices. I did some investigation about these wearable devices because I am interested to see I such a device “agrees” with my life style. Unfortunately the device I want to have is not yet sold in Europe and the company does not want to ship from the USA. So that experiment will have to wait a little.

I mainly see the benefit side of it. Awareness and seeing the results directly of your activities (or lag of that) will stimulate you to keep on the right path. Advanced techniques might be very beneficial for yourself if you have treatment in an early stage. So that’s all good is guess.

Transparency of which data will be used and for what reason will be very important to get this accepted I think. I am sure that this remote monitoring will be the future and not only for insurance.

Alicia Montoya - 30 Aug 2014, 11:35 a.m.

Update from Apple: The company has tightened its privacy rules in run up to announcements of new wearable technology expected in September

While I appreciate the move to not sell my data on to advertisers (incredible this even needs to be said!!) I'm still not comfortable with all the other people / companies they plan to share my data with.

And sorry but I don't agree with Johan and Oliver above. I'm certainly very happy to share tons of data *of my choice*. I do it all the time and love the fact that Amazon for instance uses that to predict my choices and suggest further offerings. But just because we're into new tech and happy to share consumer data doesn't mean we want governments and companies to hold more private like data on our health.

For me, there are differences in the data I wish to share or not (past buys with sellers like Amazon yes, my latest medical no), and the institutions I'm happy to share it with (my latest medical results with my doctor yes, not with Nike or Apple). Am I alone to make that difference? I'd love to hear how others feel about this...

Regina Berens - 31 Aug 2014, 8:18 p.m.

What I'd really like to see is more explicit disclosure of what's being "shared". Not "we may share your data with selected marketing partners" (that could mean anything) but "we will sell the details of your purchases plus demographic information you have provided which will not personally identify you to firms which will use this information to choose the banner ads that you see" or "we will provide the duration, frequency and intensity of your workout data on a daily basis to your employer's Wellness Program provider, with your name and e-mail address".

I also want to get some of this valuable data back, in return for providing it. I once beta-tested a wearable fitness tracker that required that I enter workout details on their site (it did a poor job of even measuring steps) but provided no charts or other history in return. I stopped using it. The device I use now is valuable to me because of the information I get, including history and current level of training. I have the same attitude towards hotels that send surveys to me after a stay. What do I get for my time and my comments? Nothing. I've happily uploaded over 100 detailed reviews (with pictures) to TripAdvisor because I get something in return.

Alicia Montoya - 10 Sep 2014, 9:11 p.m.

What about hacking risks? Following the release of Apple's iPhone 6 and Apple Watch, Zurich looks at the potential risk of cyber criminals accessing our data or breaking into our devices to make unauthorized payments or even access accounts:

But, concludes the insurer: "Though risks are always there, the reality is that they are outweighed by the benefits of such technology". I must say, from all the studies I've seen on eHealth, I have to agree. Bring on smart, personalized data and devices!

Sandeep Mahajan - 11 Sep 2014, noon

Interesting post and the subsequent discussions. The basic fundamental is that we are moving to more of a digitalised world than before. The moment you call to the Pizza outlet, they not only greet you with your name but also have a dossier of your favorites and food allergies. So this is the next step.

Am already seeing health conscious people wearing various gadgets recording their movements and other parameters, the article talks of broadening the base. The mechanics of how and when this comes and for who all is what only matters.

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