While the intersection of wearable tech and insurance has some ethical dilemmas, innovations are making the argument for ways it can stop issues before they happen.
Insurance has always been about managing risk, and reducing the risk of a large financial loss by having a policy in place that will reimburse you for losses that occur. The idea has generally been about making up for a loss, but in the recent past the focus has shifted more toward the practice of actually predicting and avoiding risks before the damage is done.
Without a crystal ball, it’s impossible to know and avoid all future risks. Yet modern technology is creating more and more of a “crystal ball” scenario each day. In our whitepaper Prevention is the New Solution: The Changing Landscape of Risk Reduction, we’ve covered the past, present, and future of risk management in detail. In this blog, we’ll take one small part of the picture – wearable technology like smart devices – and talk about how this advancement in technology will assist insurance professionals assess and underwrite risks, along with helping consumers avoid them.
What is wearable technology?
Wearable technology is exactly what it sounds like. It includes any electronic device that can be worn as an accessory, embedded in clothing, or implanted in a person’s body. There’s even wearable technology that can be tattooed onto a person’s skin! These technologies are able to accurately track important data about the person wearing them and communicate that data to a database.
Many individuals use wearable technologies on a day-to-day basis. Maybe they track their daily step count with a smartwatch or use a bluetooth headset to communicate hands-free. But, wearable technology goes beyond personal use. It also has major benefits to the healthcare industry. With its ability to collect data on things like heart rate, blood pressure, and body temperature, wearable technology has proved to be invaluable to the medical field both on macro and micro scales.
How wearable technology can reduce healthcare costs
In the United States, healthcare spending hit a record high in 2020 accounting for 19.7 percent of the country’s gross domestic product. Of that, studies show that over 25 percent of the money spent treating illness is spent on treating preventable health conditions.
Whether we’re dealing with cancer, diabetes, or heart disease (among many other conditions), one key to better health outcomes is detecting the problem early and providing early medical interventions. Wearable health technology can play a vital role in this effort by detecting biological patterns that are associated with serious conditions before a person or their doctor would otherwise know.
For the general public, wearable technology can do everything from keeping track of your heart rate and sleep cycle to helping you wash your hands frequently and for long enough to prevent communicable disease. These basic functions come standard with many smart watches and can provide useful information to help people make healthier habits.
For those who’ve already been diagnosed with a serious health condition, or who are at high risk, even more specialized wearable technology (smart blood pressure monitors, smart glucose monitors, smart pacemakers, and more) can alert the individual and their medical professional to early warning signs and patterns that indicate a problem.
Through a combination of wearable technology and machine learning, devices can now predict depression, detect the severity of Parkinson’s disease, and alert us to the early warning signs of heart attacks. Since prevention is less expensive than treatment, the widespread use of wearable health technology, once achieved, could have a large positive impact on our population’s health and healthcare spending.
More than just counting steps
While it’s always a good feeling reaching your 10,000 steps a day, hopefully you now see how wearable technology can be so much more than that. Its use in the medical field is already helping reduce the risk of financial loss and human suffering by predicting major health conditions before they become untreatable.
Reducing your risk as an insurance professional
With all this talk about risk management and prevention, you’re fully convinced that implementing risk-reducing strategies and adopting a safety-minded culture is the best way to ultimately reduce insurance costs and the costs of losses. And you’re definitely convinced that modern technology will be key to achieving these results. Right?
So, why is it that as an insurance professional you’re willing to set these convincing facts aside and just roll the dice when it comes to risks within your own company? If you’re feeling a bit called out right now, don’t worry: You’re not alone! The majority of insurance carriers, agencies, and MGAs still tolerate a large degree of risk within their organization based on outdated licensing and compliance practices.
Luckily, the solution isn’t at all daunting to implement. AgentSync makes it simple to reduce the risk of non-compliance, and practically eliminates the threat of legal and financial penalties that come along with operating outside of license and appointment regulations.
If you’re ready to learn more about proactively reducing your organization’s risk of regulatory missteps, check out AgentSync in action today.