New digital devices change healthcare and illness policies
More and more insurance companies are redesigning their offer based on the use of “smart bracelets” (wearable devices) that provide real-time data on physical activity, health status, and lifestyles of customers. With this solution, insurers are able to better define the level of risk for various customers and reward those customers who lead a healthy lifestyle with substantial discounts on policies.
At a time when Western economies are dealing with the crisis of the welfare state, the demand for innovative health and care services is growing, particularly for the elderly or disabled people, who can find the right solutions by combining technology and insurance.
Wearable devices help to keep overall health under control, for example, by measuring heart rate, the number of steps taken in a day and calories burned, thus supporting prevention activities that drive people towards a better lifestyle.
The industry of wearable devices, simple wristbands or smartwatches connected to smartphones or tablets, is in full development. In the second quarter alone, over 21 million units were sold (+5.5% compared to the previous quarter), while forecasts indicate more than 500 million wearable devices will be in circulation by 2021.
These devices allow insurers to gather information on customers, which can be used to customise products according to the needs of different segments of individuals, with personalised rates when the two major risks for insurance companies are reduced: moral hazard and adverse selection.
This formula is increasingly preferred by consumers who, by adopting a healthy lifestyle, are able to prevent the onset of illnesses and can more easily choose the most appropriate insurance solution, also achieving savings on the policy’s costs.
Some may not wish to transmit their biometric and physiological data to companies, but according to some research carried out in the United States and Europe, this does not seem to be a problem for the majority of policyholders, provided that they can obtain discounts on coverage.
However, the challenge has only just begun. Certainly, offering insurance solutions that encourage the use of electronic wristbands or other wearable devices emphasises the social role of insurance companies.
These are some practical examples of how the insurance business and technology can improve people's quality of life. But we are only at the initial stage of a process that will be long and characterised by the fast pace of technological innovation.
Generali Vitality Gmbh is the business unit and competence center for the development of the Generali Vitality project in Europe to encourage and reward healthy behaviour for customers seeking a healthier lifestyle. The purpose of this educational prevention initiative is to encourage participants to improve their overall well-being condition, while also reducing expenses for medical care. In fact, there is a rewarding system for those who regularly exercise, maintain a good dietand make regular medical check-ups. From 2016 this program is available in Germany, France and Austria, and the extension to other countries is planned for the future. The company manages product development and program management throughout Europe.
For more information, please visit GENERALI GLOBAL LINES & VITALITY.