How the growth of wearable devices benefits insurers
Last year, Forbes predicted that more than 411 million wearable devices — including everything from fitness trackers to wristbands, smartwatches and even fashion accessories — are expected to be in circulation by 2020.
Of these, a great many are also able to capture data such as sound and video, as well as track health and exercise habits. In the latter case, this can range from sleep patterns to the number of steps users take each day to the average amount of calories one tends to burn on a weekly basis.
As a result, these gadgets are becoming increasingly compelling from the standpoint of insurance companies, which are now offering discounts and savings for consumers who agree to share health- or general-usage-related information. The surprise windfall can be credited to the growing insights such devices provide into overall safety and wellness and the ways in which they promote positive behavior among owners.
Wearable devices in the insurance industry
From an insurance company’s perspective, of course, discounts tied to wearable devices make perfect sense. On the medical side, a healthier customer is less likely to experience health-related problems that require treatment insurance carriers may be expected to pay for. What’s more, the information general carriers can gain from these accessories is also tremendously helpful when creating new insurance packages and services and managing surrounding risks and expenses.
Keep in mind that some wearable devices can also snap videos and pictures on the fly, which may come in handy when filing claims remotely or online. These claims can often cost far less to process than those that require the active presence of customer service or field representatives to handle. Certain varieties of wearables can even passively capture data and transmit it during use to third-party providers such as insurance carriers. This includes the kind of data that may come in handy when assessing fault or liability related to accidents or other concerns.
Armed with the real-time data wearable electronics provide, insurance companies can more effectively manage risk, improve predictive capabilities and minimize cost expenditures. What’s more, these providers can also more effectively tailor plans and packages to suit specific audiences and even individuals, including providing more affordable programs to those with better driving or exercise habits. Insights gained through these channels can further help insurance providers streamline day-to-day operations, stay better attuned to emerging opportunities or concerns and more capably allocate resources as needed. They can also provide significant benefits when it comes to maximizing advertising and marketing dollars, given the helpful insights into consumer behavior and the high-tech usage patterns wearable devices provide.
User data and behavior
Wearable electronics provide insurance carriers with a wealth of information that can be mined for useful business insights. Because these devices are designed to be used on a regular basis and integrate seamlessly with users’ everyday lives, they can also help these businesses track and see how habits change over time. In a field where it’s crucial to anticipate potential areas of profit and loss and associated risks, such gadgets provide far greater visibility into user behavior and far greater ability to manage these risks than ever before. Bearing this in mind, wearable devices can help insurance providers do business more readily and cost-effectively, and these savings can be passed along to everyday consumers.
Throughout the coming years, wearable electronics are only expected to make even more of an impact on the insurance business. From helping to boost customer engagement to streamlining the claims processes, such technologies promise to revolutionize the industry in ways few could anticipate.
Image source: iStock