One of North America’s largest life insurance providers recently announced it is switching to a new model where all of its policies are interactive – customers are encouraged to track and share their biometric data so the company can better assess risk.
Some are hailing it as a win-win but privacy and data experts are concerned about the unintended consequences. CGTN America’s Karina Huber has more.
Marc Sellouk weighs 40 pounds less today than he did three years ago.
“There was a time when I would sit in my office all day. And you sit in a chair and you just keep doing work and you forget that mobility is life, right? And you have to keep moving,” said Sellouk, CEO of Flewber.
Six months ago, he got an Apple watch. He uses it to track his steps and his heart-rate. He says it’s helped him stay committed to his fitness goals.
“Visualizing it, looking at it, touching it, feeling it, it’s different than just thinking about it,” said Sellouk.
Companies like John Hancock, one of the biggest life insurance providers in North America, believes fitness tracking devices are an incentive to leading a healthier life.
The company recently announced it will no longer offer traditional life insurance. It will only sell so-called “interactive policies” that track fitness data through wearable devices.
Policyholders don’t have to share that data but if they do and if they hit certain fitness targets, they get discounts on their premiums and other perks.
“You want to live a long time and they’d love you to live a long time. It’s a win/win for both,” said Colin Devine, Strategic Advisor for C. Devine & Associates.
Devine says the programs are all about using big data to improve risk assessment.
Those who exercise regularly, are more likely to live longer which means more premiums for the insurance company and lower payouts. There are also benefits for the policyholder.
“So if you are a very healthy person who works out several times a week just as if you’re a good driver, why shouldn’t you pay less for your insurance,” said Devine.
But data experts are concerned about the unintended consequences of sharing biometric data both in terms of how it is going to be secured and how it is going to be used.
“We may not even know the different ways that they’re intending to use this data as it evolves because they may not know at this time and it’s just a Pandora’s box, if you will,” said Shawn Tumi, Partner at Spencer Fane LLP.
Tumi says consumers need to make their own assessments on whether the benefits of sharing personal data with companies outweigh the potential long-term risks.