How wearables will change insurer-customer relationship

Data will strengthen practice of usage-based insurance

The Apple Watch will debut in April without some of its highly anticipated health functions, but the market for wearable technology nonetheless remains poised to change the way the health insurance industry operates, according to Insurance Networking News.

Michael Ellison, president of financial services consulting firm Corporate Insight Inc., wrote that the Apple Watch--expected to sell as many as 30 million units within weeks of its release--and other wearable devices can bolster a practice known as usage-based insurance.

Devices that record basic vital signs (heart rate, steps taken, calories burned) and sync with smart devices that measure weight and body mass index will give insurers a "previously unattainable level of insight into the lives of their members," Ellison wrote. Insurers can then use this data to reward members for healthy behavior and motivate them to keep up the good work.

Americans are eager to use mobile tools to manage and improve their personal health, and nearly 90 percent are willing to disclose personal health data if it will boost treatment options.

Such a strategy is not flawless, Ellison admitted. For starters, existing wearable technology functionality is limited, and available data is therefore limited. What's more, as FierceHealthPayer previously reported, there's a fine line between rewarding personal responsibility and implementing discriminatory pricing schemes.

However, Ellison said, technology will improve; soon, insurers will be able to reward customers for getting a good night's sleep or submitting a blood pressure reading in addition to just meeting "active minutes" goals. Data will also help payers separate bad habits that should be penalized--namely bad diets and smoking--from pre-existing conditions that should not.

Wearable devices are prime for global growth, and the Apple Watch is expected to drive adoption, but Apple is far from the only player in the wearable space. In 2013, Samsung and Cigna signed a multi-year agreement to co-develop health and wellness features on Samsung devices, FierceMobileHealthcare previously reported. For example, the Coach by Cigna app, which helps users track fitness goals, is available to Samsung Galaxy S5 users. Samsung has also partnered with Aetna and Humana, as well as healthcare providers such as the Cleveland Clinic, Ellison wrote.

For more:
- read the Insurance Networking News article

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