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How Fitness Trackers and the Internet of Things are changing Health Insurance.

Personal Fitness and the Internet of Things

With advances in technologies, the costs of sensors have plummeted, making it possible for manufacturers to embed them into smart watches and fitness trackers. These wearable devices measure data such as the number of steps walked, heart rate, quality of sleep, steps climbed, and a number of other personal health metrics.

Pairing a wearable with a smart phone and an app will enable the collected data to be stored in the cloud. The user will also have the ability to log other attributes such as food intake, activities, and weight and set daily and weekly goals for themselves for steps, calories burned and consumed, and distance walked, which can be track over time. With this, a person's fitness is "connected" to the internet, allowing personal fitness to be "gamified" as users are now able to compete against friends and colleagues in a race to achieve personal fitness goals.

A 2013 wearable pilot involving 600 subjects, conducted by insurer, Cigna, indicated that 80% of the participants were “more motivated to manage their health at the end of the study than at the beginning." Seeing the potential for fitness trackers to put a break to corporate healthcare costs, fitness trackers are also starting to get included as part of corporate wellness programs.

In a recent interview with Fortune, James Park, the CEO of Fitbit, one of the leading makers of fitness trackers, said “I would like people to think of Fitbit as ‘the’ company that’s had the most profound impact on their health outside of a hospital.”

Health Insurance Leverages on IoT

With improved connectivity and fitness trackers being widely available, Insurance companies have started to offer insurance that integrate features that can make use of this data.

In July 2016, Thailand became the latest country in Southeast Asia, where insurer AIA Group, is teaming up with Vitality, a the global leader in integrating wellness benefits with life insurance products, to launch a science-backed wellness program designed to help customers manage and improve their health more effectively. To date, AIA Vitality has been launched in Hong Kong, Singapore, Australia, Philippines and Malaysia.

AIA Vitality members are eligible for discounts on a range of fitness programs and products including fitness trackers. Points are accumulated for various fitness activities which can be exchanged for lifestyle rewards. Members can also get discounts on annual premiums, which can range from 5-20% of premiums for the first year and up to 25% in renewal years, depending on the member's AIA Vitality status.

While the benefits of fitness tracking might be obvious, policy holders might find it a hassle to make the purchase and integrate it into daily life. To mitigate this problem, insurer John Hancock (also partnering with Vitality), launched its program in 2015, offering free Fitbits to new members in the U.S. This is inline with a 2014 survey by PwC, which found that 67% of the survey correspondents would use a smart watch or fitness band if provided by their employer or insurer.

Challenges in the age of IoT

While the data from the trackers and smart devices enable insurers to come up with new product features, insurers can find themselves overwhelmed with the exponential increase in real time data being collected. This gives rise to technical challenges, ranging from storing and archiving the data, handling massive volumes of data, efficiently analyzing streaming data, and most important of all securing the privacy of the data.

Technological advancement in healthcare is occurring at breakneck pace. Apple hypothesized that by proactively monitoring the health of your heart beat patterns, they will be able to recognize anomalies and inform you and your doctor to prevent a heart attack.  It is also predicted that, "ingestibles", "smart" pills that use wireless technology to help monitor internal reactions to medications, will revolutionize healthcare.

Would new "Insurtech" firms or one of the tech's big boys, like google or apple define the future landscape of health insurance? Or will traditional insurers team up with specialist technology firms to gain insight and know-how to exploit the opportunities arising from new technologies.

Join us at the 9th and 10th edition of Asia IoT Business Platform held on the week of 15th August in Jakarta, Indonesia and Kuala Lumpur, Malaysia as industry experts weight in and discuss opportunities and challenges in the age of IoT.

By: Ernest


By Ernest Ho | May 1st, 2017

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