Author(s): Raghu Gopal
We've noted the trend of consumer wearables becoming a practical tool for insurance companies to maintain a connection with their customers. Thanks to relatively low-cost, sensor-filled, body-worn electronic products, it's becoming possible to base insurance policy pricing on a user's health status. Or at least to encourage a change in behaviour (see Activity Trackers as Actuaries).
In the US, health insurance company Aetna is kicking off a campaign to subsidise Apple Watches, which employers can offer to their employees. Putting its money where its mouth is, Aetna itself will be giving all of its 50,000 employees an Apple Watch. Furthermore, the company is working on a suite of applications for Apple's Watch platform to track certain body metrics. The app will also allow users to maintain an ongoing connection with their health practitioner.
Aetna covers about 23 million people in the US. Many of the policies are written via employing companies, which provide healthcare insurance for their employees. This subsidised watch programme is only available through employer-sponsored policies.
In the UK, health insurance provider Vitality announced a similar programme offering Apple Watches to its customers. Policy holders can buy the second-generation Apple Watch for an initial payment of £69 and with the opportunity to work off the rest using steps as a currency. Taking 7,000 steps in a day earns the user three points, 10,000 steps awards five points and 12,500 steps earns 10 points. Reaching 160 points per month brings the monthly device payment down to zero.
These offers have the potential to boost employee morale and there's certainly a touch of theatrics here, with insurance companies building goodwill and riding on the coat-tails of Apple — the world's most popular brand.
Whatever the insurance companies' core intentions are, it's fair to say that wearables are creeping into new territory, from early technology adopters to practical uses. Smartwatches aren't yet healthcare devices, but they are tools with some strong applications. Products like the Apple Watch play the role of raising awareness of both physical activity and inactivity.
For makers of wearables such as Apple, Fitbit and Samsung, there's an opportunity here to pick up volumes. When people begin wearing smartwatches as a matter of policy, mainstream is getting close.