One of the forecasted future changes in health insurance is the use of wearable health telematic devices, like Fitbits, to help set clients’ premiums. 

It is unclear, however, whether consumers will accept these devices as they imply a higher level of sharing of personal information than is currently the case. 

One solution to the initial consumer reluctance is the use of premium discounts to overcome this initial reluctance. 

Research conducted by Massey indicates that 83% of current health insurance consumers are willing to share personal health telematic data with insurers if sufficient premium discounts are offered. 

This is higher than many industry commentators have guessed and indicates that health telematics could have a substantial role in the future of health insurance. 

This willingness to share health data is, of course, dependent on the attractiveness of the offer insurers make. 

On average, the respondents saw a 20% discount as sufficient incentive to willingly share personal health data, with a substantial group who would accept less. 

Most respondents were willing to share daily activity data, with a lower willingness to share blood pressure data, cardiac data, blood oxygenation, or blood insulin data. Surprisingly, however, more than half of all respondents would share all kinds of data if offered the right deal. 

While respondent had a high level of knowledge of telematic health devices, comments indicate unease about how their use would link to insurers.

This means that was a premium built into the discount demanded, and implies that over time increased familiarity could lead to consumers accepting lower discounts.

In general, males were more willing to share data than females, and those with a higher level of perceived health were more willing. Income level and ethnicity had little impact on willingness. 

There was an indication that insurer inducements would help respondents stick to exercise plans on a longer term basis than occurs at present. This will help overcome the tendency for Fitbit use and exercise regimes to be temporary.

One of the major issues of concern to respondents was the level of their trust in their insurer to safeguard the confidentially of their health data and act to ethically, so that they do not abuse their increased knowledge about their clients. 

Unsurprisingly, there was a strong relationship between the respondents’ level of trust in their insurer and their willingness to share data, the level of discount required, and the kind of data they were willing to share. Surprisingly however, even those respondents who mistrusted insurers were willing to consider sharing data if sufficient inducement was offered.

This result highlights that a major element of insurer competitive advantage in the future will be their perceived trustability. This is an issue as life and health insurance companies are finding it increasingly difficult to actively engage in positive ways with clients, whose expectations of engagement have been raised by the customized approach used in the tech sector. 

Feedback from health telematics would enable health insurers to offer similar customized service if used correctly, if presented to clients positively, and if used to increase trust. A majority of respondents were in favour of increased customisation of insurance.

The research surveyed nearly 100 financial adviser clients, with a mix of quantitative questions and discussion feedback. Most respondents were aged between 35 and 54 years, and of middle to high income, which reflected the segment of the NZ population which buy health insurance.

The study was done by Upmeet Sodhi (RFA) of Mutual Solutions as part of his Massey University MBA under the guidance of Dr Mike Naylor.

Sept 2018

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