The Risks and Rewards of the Wearable Tech Insurance Boom

Did you get your steps today? How is your resting heart rate? Have you been logging your calories and exercise? Wearable tech that tracks your every heart beat is here to stay, and it’s fast becoming one more way the insurance industry is reducing risk and keeping tabs on the people it’s insuring. But just how does wearable tech like Fitbits and the iWatch help these companies reduce their risk, and how much of that risk are you, the wearer, assuming? It’s a new and developing field and there’s lots of grey areas.

In September, Fitbit announced it was launching ‘Fitbit Care’, “A powerful new enterprise health platform for wellness and prevention and disease management”. The new platform, the company crowed, would help people get, and stay, healthy.

“With Fitbit Care we are delivering a solution that empowers people to take control of their health, by providing the accountability, support, guidance and resources that remove some of the most difficult barriers to behavior change,” Dr. John Moore the Medical Director of Fitbit Health Solutions said in a press release.

The company also announced the new program would be taken up by health insurance company, Humana, which would roll it out as part of its employer group section, meaning companies that use the health insurance giant can offer the tech to the more than five million people.

The Humana news came soon after health and life insurance giant John Hancock announced it would incorporate fitness tracking into all policies, offering incentives and discounts to customers who joined in with the program.

John Hancock isn’t forcing anyone to use the tech, but insurance is expensive, and any price breaks are welcome for consumers feeling the pressure. But what’s in it for these insurance companies?

It’s pretty simple. The early data shows that people who use fitness trackers live longer. Brooks Tingle, head of John Hancock’s insurance unit, told Reuters that the company’s data from its existing ‘Vitality’ program indicates customers who use fitness trackers live between “13 to 21 years longer than the rest of the insured population”.

That means more years of paying life and health insurance premiums, and less payouts for costly health conditions. Healthier customers grows an insurance company’s income and reduces its risks and outlays. Wearable fitness tech is win win for insurers. It enables customers to shoulder more of the burden, and health insurers to collect vast tracts of data that enable them to predict trends and monitor the habits of millions of customers.

If that all sounds a little ‘Big Brother’, well, it is. While reduced premiums and health bonuses might sound like a great idea for something you’re already doing (half of Americans wear fitness trackers already), there is potential for this data collection and monitoring to take a less appealing turn.

According to Forbes, there are already companies pushing for employers and insurers to incentivise the behaviour of fitness tracker wearers, with sticks, not carrots. And there are real concerns that such personal data collected on such a large scale could lead to big privacy issues.

Artificial Intelligence researcher and Professor at NYU, Kate Crawford, warned on Twitter the dangers of plans like the John Hancock program.

It’s crucial to define what is considered personal data in such scenarios, ensuring transparency and accountability in the collection and usage of individuals’ information to mitigate potential privacy risks.

“We saw this coming, and here it is. Endless trapdoors ahead: data inaccuracies, intentional gaming, constant intimate surveillance 24/7, data breaches that will be infinitely worse,” she wrote in response to the company’s news.

Research into the implementation of wearable fitness tech in the workplace indicates that while people don’t usually begin with privacy concerns, they develop over time. One study of employees in Denmark who chose to participate in a steps-based program, found they grew concerned about privacy as the program continued.

“Initially concerns about step count disclosures were dismissed as harmless. Over time however, participants discovered how revealing these types of disclosures could potentially be and thus they were forced to renegotiate boundaries of disclosure in situ,” the study’s authors wrote.

These types of concerns are the tip of a very large iceberg. Insurance companies might be able to use your fitness tracker data to determine claims, or deny them, depending on how the data is interpreted.

The industry is growing fast, and there’s no telling just yet where it will end up, but for now, both consumers and insurers seem happy to jump on the fitness tech track.

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