Wearable devices, such as smartwatches, are booming in developed nations. Worldwide, the sale of wearables is expected to average 20% growth each year over the next five years, making it a $29 billion market with 243 million unit sales by 2022.
Today’s wearable devices track real-time data about the user’s physical and health-related activities, and many biomedical firms are developing more extensive monitoring and diagnostic capabilities. It’s not surprising that more health and other insurers are leveraging real-time data gathered from wearables to gain actionable insights, according to Capgemini’s Top-10 Technology Trends in Health Insurance 2018 report. Similarly, the World Insurance Report 2018 (WIR 2018) found that 16% of health insurers are in the deployment phase for gathering real-time customer data from wearables.
Advancements in analytical capabilities and members’ increased willingness to share data are fueling health insurers’ adoption of wearables technology. Firms such as Munich Re and AIA Singapore have successfully launched proactive wellness initiatives that focus on customer health data from wearables.
Wearables’ data benefits health insurers and providers
Data captured through wearables can help insurers engage with members more meaningfully, increase touchpoints and improve both satisfaction and outcomes. Moreover, wearables’ data analysis offers insights that may be used to mitigate risk proactively through real-time feedback and timely communication. When shared with providers, it renders a better picture of the patient’s health, which may lead to better care and reductions in service costs.
Wearables can act as a remote diagnostic device to aid telemedicine and enable convenient and cost-effective care. What’s more, wearables offer insurers a more comprehensive picture of patient risks to support accurate underwriting and better business decisions.
Many future-focused payers as well as providers have already realized the benefits of wearables and are using the technology to engage with members, patients, and even caregivers, and encourage healthy living by offering discounts to those who adopt wearable devices.
For instance, UnitedHealthcare and Fitbit have partnered to reward users up to US$1,500 a year in healthcare credits for activities recorded on their wearable devices. Aetna encourages members of large employer plans to use an Apple watch through a device discount of up to $200. Similarly, Cigna offers members discounts on policy premiums and cash incentives for meeting fitness goals, with the help of health coaching programs that include wearables.
However, insurers have yet to tap into the full potential of wearable devices. WIR 2018 revealed that health insurers’ readiness for real-time member data capture is nascent, with 42.2% of insurers saying they had only recently allocated budget to build this capability. Further, only 12.5% of firms surveyed said they had the complete front- and back-end infrastructure to collect real-time data. The report also revealed that 58% of health insurers are only in the conceptualization stage when it comes to capturing real-time member data from wearables. Therefore, opportunities abound for health insurers to adopt smartwatches and other wearable devices, and to integrate the digital technologies within their core systems for a seamless flow of real-time data.
Among other future-proofing strategies, health insurers can boost their analytical capabilities by investing in advanced analytics tools that carve-out insights from real-time member data to successfully realize the range of wearables’ benefits. With more and more payers embracing wearables adoption, we envision a future where customers and members are charged premiums based on lifestyle choices, thanks to personalized risk assessment and insurers’ underwriting capabilities.
Tomorrow’s health partners
The industry appears to be shifting from a reactive model of care, where insurers act after an incident has occurred, to a proactive and preventive care model, where insurers monitor members’ health and engage in timely care interventions. The probable results? Improved satisfaction and significant cost efficiencies.
To learn more or discuss how wearables will continue to change the course of the insurance industry, feel free to connect with me on social media.