Smart move, or the beginning of a privacy nightmare?
The North American life insurance company, John Hancock, has announced that it will no longer underwrite traditional life insurance policies, and instead only sell ‘interactive’ policies that include optional fitness tracking through wearable gadgets and devices.
The move by the 156 year-old company follows what appears to have been a successful trial project that began in 2015, as part of the ‘Vitality’ range of insurance policies.
As part of an incentive program, policyholders will be able to earn discounts and special rewards such as gift cards if they hit and maintain exercise targets. The caveat to all that though is that customers will have to log exercise and activity using fitness wearables such as Garmins, Fitbits or Apple Watches. While that seems all good, policy holders will have their activity levels monitored by the life insurance company, and exercise will have to be uploaded to John Hancock.
The Vitality range “has been an optional benefit,” said Brooks Tingle, president and chief executive of John Hancock Insurance. “Now, we’re saying we won’t issue life insurance policies without these Vitality benefits on them.”
Win Win or all a bit 1984?
The idea behind ‘Vitality’ sounds good, at least from a consumer point of view. Everybody wins, right? On the one hand policyholders are continually incentivized to adopt healthy habits and lifestyles and have a better chance of living longer… and John Hancock wins by theoretically being able to collect premiums for longer and pay less in claims.
Not everyone agrees however. According to the BBC report on the matter, privacy and consumer advocates have raised serious concerns “about whether insurers may eventually use data to select the most profitable customers, while hiking rates for those who do not participate.”
John Hancock has also said that customers will not have to log activities using a smartwatch to get life insurance, but would not be eligible for discounts if they did not.
Do people who use fitness trackers live longer? Who knows, yet!
The company told Reuters it was too early to say whether it was paying fewer claims because of the Vitality programme. But it said the data it had collected so far suggested that Vitality policyholders lived between 13 and 21 years longer than the rest of the insured population.
Time will tell.