Page 91 - Bloomberg Businessweek - November 19, 2018

Bloomberg Businessweek The Year Ahead 2019 Finance

Solution
Health Data

▷ Life insurance sales have slipped� One company is offering deals
to users of wearable devices

Apple Watches and Fitbits are increasingly part policyholders. Instead of just sending the cus-
of everyday life. People track daily steps, log tomer the occasional bill, “we’re interacting with
health information, even use the devices to com- customers through Vitality 40 times a month.”
pete against friends and family. Now life insur- The industry needs new ways to attract cus-
ers want in on that. tomers. The percentage of people owning life
John Hancock, a unit of Manulife Financial insurance has fallen steadily for years, though the
Corp., recently expanded an optional pro- decline is leveling off. And with more people buy-
gram to reward customers for healthy habits. ing coverage online, insurers can’t rely as much
Participants can earn points for tracking their on agents to build long-term client relationships.
daily jogs or for their meditation practice, and Life insurers have long gathered extensive
then use those points for rewards toward pur- data about customers. Many policies require
chases on Amazon and other sites. Sometimes applicants to undergo a medical exam, giving
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they can even save money on premiums. the insurer a snapshot of their health when they
What’s in it for insurers? For one thing, if sign up. But the idea of getting fresh, real-time
policyholders live longer, insurers don’t have data spurs the question: When does the insurer
to pay out as soon, according to Chad Hersh, a know too much? There’s a growing need for
vice president for insurance at consulting firm guidelines on how compa-
Capgemini. Even if wearing a wrist computer nies use fitness infor-
doesn’t by itself make anyone live longer, there mation, says
may be a more subtle advantage for insurers. The
customers who want to sign up for such a pro-
gram might be a little more health-conscious—
and less risky to cover.
Tal Gilbert, chief executive officer of
Vitality USA, the outside company that worked
with John Hancock to create its program, agrees Pam Dixon, exec-
that healthy customers tend to be more likely utive director of the World
to consider signing up but says there’s no Privacy Forum, a nonprofit. While
penalty for people with health issues. she doesn’t think using such infor-
Brooks Tingle, president and CEO of mation is necessarily negative, she says
John Hancock Insurance, says the the fact that the relatively cautious insur-
program gives the company ance industry is doing so is “a red flare in
a way to connect to its the sky for all of us that this is here, and it’s
having a meaningful impact on our lives.”
Vitality’s Gilbert says insurers are used to han-
dling sensitive information, “so the bar is very
high in terms of how we look after that informa-
tion internally.” Tingle says the challenge is hav-
ing a program that customers can stick with:
“How do you combat the so-called New Year’s res-
olution effect?” <BW> �Katherine Chiglinsky