Wearables, health apps can lower insurance premiums
Insurers join hands with fitness tech firms, serving up incentives to make you hit the gym
New Delhi: This February, when Max Bupa Health Insurance Co. Ltd announced a partnership with fitness technology firm GOQii, and healthcare companies Practo and 1mg, the idea was to introduce a digitally enabled health insurance plan called “Max Bupa GoActive” for consumers who are mobile and also use wearables.
Max Bupa uses GOQii’s health coach services to track users’ behaviours and offers discounts to those who lead healthier lives. GOQii’s health data allows the company to assign “health scores” to customers. Vishal Gondal, founder of GOQii, explains that “this is a score based on data that GOQii gets from your usage of its fitness trackers or app”.
The scheme appears to be bearing fruit. C. Shashank Saini, a Max Bupa GoActive subscriber, said he has been exercising more because of the health coach he gets with his insurance plan.
Max Bupa is not a lone case. Apollo Munich Health Insurance Co. Ltd and Aditya Birla Health Insurance Co. Ltd have similar plans. Further, John Hancock, one of the oldest insurance firms in the world, recently said all its plans will now be “interactive” plans. For Hancock, that means it will reward customers who lead healthier lives, recorded through the use of health data using wearables and smartphones—much like Max Bupa.
These digital tie-ups appear to favour both users and companies. While consumers get discounts on premiums, wearable makers get to sell more products and insurance companies pay lower amounts because consumers are healthier.
However, there are privacy concerns too. Insurance firms could, theoretically, use your data to target specific customers. In Max Bupa’s case, though, Gondal clarifies that only the “health score is shared”. “This is the only data that Max Bupa gets,” he insists. Gondal explains that regulations do allow insurers to ask customers for data but the users have to “explicitly give permission for the same”. On a day-to-day basis, insurers can’t see person-specific data, and get anonymized data instead about certain subsets, like 30-year-old men, he added. A spokesperson from John Hancock clarified the firm doesn’t use the “physical activity information” shared with them.
Consumers do not seem to mind the trade-offs. “I feel the exchange of data is fair because the coach also lets me stay active,” says Saini who gets a ₹ 5,000 discount on the yearly premium for achieving daily step counts. However, what about security? “With the ability to use wearable tech to their benefit, hackers will have countless ways to infiltrate business data with very little effort in return causing more than just a concern for IT professionals and web developers alike,” cautioned a March 2017 blog post on the Red Hat Developer blog.
Shrenik Bhayani, general manager for Kaspersky Labs (South Asia), explained that with proper data protection, processing and privacy policies in place, risk of data theft is minimized. He also pointed out that “multiple health institutions and various fitness apps” have been hacked this year.
Further, wearables are not medically approved devices. In fact, even the recently unveiled Apple Watch Series 4 isn’t approved for medical usage. Instead, these receive consumer grade certifications, meaning they are “information only” devices.
Being used alongside insurance plans could give wearable makers incentive to improve information accuracy. “There is an underlying assumption that the healthy and fit are generally good risks. However, it is not clear how scientific the data and pricing models are that underlie these discount schemes. Improved data will provide the basis for a more structured approach for discount schemes,” wrote Kelvyn Young, head of Life and Health partnerships at the Swiss Re Institute, in a blog post in 2017.
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