Page 53 - The Insurance Times February 2026

Case Study

Wearables and Health Insurance Innovation:

From Risk Transfer to Risk Prevention

Executive Summary Y Rising claims due to lifestyle diseases

Wearable technology has emerged as one of the most influ- Y Difficulty in differentiating low-risk and high-risk lives
ential innovations shaping the future of health insurance. Y Increasing fraud and overutilization
Devices such as fitness bands, smartwatches, and medical-
From the Policyholder’s Perspective
grade health monitors are fundamentally altering how in-
Y Same premium despite healthy behaviour
surers assess risk, price policies, manage claims, and engage
with policyholders. This case study examines how wearables Y No incentives for preventive care
are driving a shift from traditional, claims-driven health in-
Y Limited engagement with insurer except during claims
surance models to prevention-focused, data-enabled insur-
ance ecosystems. It critically evaluates the opportunities, Wearables as the Solution: How Innova-
challenges, and long-term implications of wearable-led in-
novation for insurers and insureds. tion Is Enabled

1. Dynamic Risk Assessment
Introduction: Why Wearables Matter in Wearables allow insurers to move from one-time underwrit-
Health Insurance ing to continuous risk monitoring. Instead of relying solely

Health insurance has historically relied on static data—pro- on medical tests, insurers can observe trends in physical
posal forms, medical tests, age, and declared health condi- activity, obesity risk, and cardiovascular indicators.
tions—to assess risk. This approach provides only a snapshot
of an individual’s health at policy inception and fails to re- Impact:
flect ongoing lifestyle changes. Y Better risk segmentation

Y Fairer pricing over time
Wearables bridge this gap by generating continuous, real-
Y Reduced adverse selection
time health data such as physical activity levels, heart rate
variability, sleep patterns, calorie expenditure, and, in some
cases, blood oxygen levels and ECG readings. For insurers, 2. Wellness-Linked Insurance Models
Insurers are increasingly linking wearables to wellness pro-
this represents a paradigm shift—from insuring illness to
managing health. grams where policyholders earn:
Y Premium discounts
Key Problem in Traditional Health Insur- Y Renewal benefits

ance Y Reward points redeemable for vouchers or services

From the Insurer’s Perspective Example (Model-Based, Not Brand-Specific):
Y Limited visibility into post-policy health behaviour A policyholder achieving daily step targets over a policy year

46 February 2026 The Insurance Times