By FintechOS · August 02, 2022
5 minute read

Wearable devices for health insurance: pay less, live better

Telematics: pay less for living better

Telematics is the use of wireless technology to transmit data over a network. Telematics technology has been around since the early 2000s, but it’s now becoming increasingly popular with health insurance providers, particularly by connecting wearable devices like fitness trackers.

The health insurance industry uses this technology to monitor and manage health. It’s a broad term that covers a wide range of technologies, including wearable devices, apps, and sensors.

Telematics is a disruptive technology that can help health insurance providers offer better coverage and reduce costs. It allows insurers to give the best rates for their customers. Yet, it’s also an opportunity for companies who want to offer their customers better and more-personalized coverage without having to hike up the price of their premiums.

How to use telematics to provide innovative services

Insurance companies like Vitality are increasingly offering discounts on premiums for customers who prove they’re living healthier lifestyles by using fitness trackers. These devices can monitor heart rates, sleep patterns, exercise, and various other facets to ensure the lowest premiums are offered to those at the lowest risk. Insurance companies then use the data to provide more-accurate rates and more-personalized policies.

Telematics in the health insurance industry: 4 ways to use telematics to disrupt it

The use of telematics in the health insurance industry has been growing rapidly over the past few years, and for good reason.

There are four ways telematics can disrupt the industry:

  1. Reduce costs: telematics can lower healthcare costs by reducing unnecessary procedures, hospital stays, and other costly treatments
  2. Improve patient safety: telematics may help prevent future medical errors by tracking patient data and providing real-time information about their condition to doctors
  3. Improve customer satisfaction: with telematics, customers will be able to track their insurance coverage and make sure they are covered for all necessary procedures or services
  4. Reduce adverse events: telematics will give insurance companies information about patients with a higher likelihood of adverse events, and it will help them tailor coverage more accurately to their needs

Privacy challenges for telematics

Data and analytics have been proven to be an effective way of improving healthcare outcomes. However, there’s also the challenge to privacy and access to personal information.

It’s essential not to alienate customers and stress that those who don’t wish to supply data do not have to. The only concern is selling the value of this data to customers. The message must be: ‘here is your rate, and here is a lower rate you can get if you wear a fitness tracker, no pressure’.

Tackling the rise in healthcare spending

There are an increasing number of ways that insurance companies are attempting to combat rising healthcare costs and the increase in chronic illness. Rising healthcare costs have made it difficult for many people to afford the coverage they need. To combat this, some insurance companies are implementing new telematics programs designed to give consumers options and lower their costs.

Insurance providers are trying to find new and innovative ways to lower the cost of their healthcare plans without compromising on quality. Companies like Vitality are already using telematics to provide consumers with lower healthcare premiums, and they’re thriving.

What does the science say?

The growing popularity of wearable devices such as Fitbit, Jawbone, and smart scales has resulted in significant health benefits for users.

In a recent study published by PLOS One, the researchers found that people who use these devices were less likely to develop health problems and were usually in better physical shape than their peers.

Other uses for telematics data

This health data can also be used to:

  • gain insight into consumer behavior for marketing
  • provide valuable information on which marketing campaigns should be run
  • target specific groups of people with the right health insurance offers

Where to start with telematics

The telematics market is expected to continue to grow, with many companies investing in this technology and trying new ways to harness the power of data from mobile devices.

The future of health insurance is telematics, which will help people to make more informed decisions about their health by providing them with information about their activity levels and habits.

However, fully utilizing the power of telematics requires data analytics and partnership with fitness tracker suppliers. This requires technology.

The insurance industry has seen a flurry of activity in recent years. This activity is at the forefront of the latest trends and has made it easier than ever for consumers to get affordable insurance. These products are exciting for the industry, but what do they mean for you?

Challenger insurers have been around for decades. They are innovative, adaptable, and constantly seeking new ways to generate growth. They will have no difficulty installing all these shiny new toys and attracting customers with their benefits since incumbents are already struggling to stay relevant.

FintechOS Northstar provides a platform that helps you quickly understand and adopt the latest insurtech, while keeping the costs low. Discover more on our Northstar page.

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