10 Things Insurers can do with Health Data
As somebody who wears a fitness tracker, I’ve long been aware that I’m generating lots of data every day without really doing anything other than undertake my normal routine. All the time I’m wearing my tracker it’s automatically keeping track of what I’m doing and recording this on the device for upload into an online system. My tracker counts the steps I take, tracks my heart rate and records exercise activities. That’s a lot of data every day, most of which I never really use effectively.
My tracker uploads the data and shows me summary or detail information on the most important metrics around my health, most of which is useful for me to see how I’m doing at keeping fit and healthy. But this data has potentially huge value to both me AND the Life or Health Insurance industry, if I can be convinced of the value to me in sharing it with an Insurer.
Health and Life Insurance companies share a common goal with each of us around our health. They are just as keen that we stay fit and healthy, as we are. Their reasons are obviously different in that they want to reduce the chance of having to pay-out on a claim and the best way to do that is to help us to stay fit and healthy.
What could be done with the data?
The potential for this type of data, whether be at an individual level or across a segment, can vary based upon the imagination of the Insurer and also what regulations exist that may prevent some actions. Insurers have always been good at understanding and managing risk although the challenge they often face is that their business is a low touch-point model i.e. they don’t often interact with their customers. Apart from a claim, the insured often only interact with an Insurer to open or close a policy. The sudden injection of large amounts of health data gives Insurers the opportunity to better understand risk on an on-going basis as well as offer more financially attractive products based upon a healthy lifestyle. I’ve listed out some thoughts I’ve had about the types of new things Insurers can do based upon this new source of data:
- By keeping track of my exercise regime, reduce my policy premiums when I maintain an agreed level of physical fitness over a period of time. The longer I maintain or improve this level, the more financial advantageous it becomes for me
- By keeping an eye on my heart rate, recognise when I’m exercising appropriately and help encourage me to increase activity levels to improve heart health. Help me have a healthy heart by rewarding me with incentives such as discounts on heart friendly foods
- If I’m sharing my location data (i.e. GPS tracks) then analyse this and help me get value from a partner ecosystem. An example might be that if I run regularly on roads then I need training shoes with good shock absorption and I probably replace them fairly often due to wearing them out on such an abrasive surface. Rewards with offers from approved retailers of the right sorts of running equipment, based upon my profile, encourages me to not just buy these products but stay loyal
- If I’m not exercising enough then forms of encouragement are needed to help stimulate activity. Offers of additional rewards for increasing fitness levels help to motivate me to improve and providing health targets to attain help provide focus. If I’m ill then being sensitive to the impact this will have on health activities is important so don’t penalise me for something I have no control over
- If I’m a competitive sort of person, looking at aggregated data and enabling me to challenge a broader community can stimulate positive reactions. Rewards for achieving new personal goals or ‘beating the pack’ make this an attractive option
- If I run outdoors and during all times of the year, I probably have a range of clothing I wear that varies upon season, weather and temperature. Research on the latest clothing technology that keeps me cool in summer or warm & dry in winter helps me make decisions quicker and easier. Links to recommended providers of these products, with prices at an advantageous rate, encourage me to stay a part of the ecosystem
- Create virtual clubs for me to become part of, based upon my exercise profile. If I run a great deal then a virtual running club would help motivate me to keep activity levels high plus I get to share my pains & gains with like-minded people. If I run, swim and jog a great deal then a virtual triathlon club is probably more appropriate. If I’m a casual walker, provide new walking routes that extend my distance walked or throw in some hills. Reward me when I’ve achieved a new level of activity or fitness
- If I have a set of WiFi connected weighing scales, reward me for sharing this data when I lose weight or reach a milestone. If I don’t have a set, tie achieving a fitness level to generate a discount off the cost of WiFi scales achieves 2 different goals at the same time
- Encouragement around sharing other forms of health data, such as cholesterol levels or height/weight, helps build a broader picture of overall health. Encourage and reward me when I reach certain milestones
- Recommend other forms of exercise that may use different muscle groups or provide other forms of health benefits. Examples might be for people that cycle a great deal they would benefit from lots of leg stretching so recommending a good, local stretching class would help. Reward me when I’ve done something new
The Health Data Ecosystem
Achieving all of this requires an ecosystem of players who each provide a part of the overall value chain. Insurers are already familiar with the ecosystem concept in that most already have one albeit with brokers and or other financial institutions. Ecosystem actors could include:
- Fitness tracker manufacturers that provide devices and often web sites for storage of health data
- Third party software or hardware companies provide specialist capabilities such as easy calorific counting software or high accuracy heart rate monitors
- Recommended retailers of sporting equipment and goods that can provide the physical items used in exercise
- Data aggregators collate multiple sources of health data and generate a wider health picture
- Insurers utilising the data and provide the linking reward capability across the ecosystem
Part of the requirement of the ecosystem is the joining of forces with other parties and tying together a reward system for getting and staying healthy. The healthier a person is, the less financial risk they should be. If they are a lower financial risk then reward individuals accordingly. If they have a household policy or an Insurer can generate a household view, reward group improvements too.
The Value to an Insurer
So there is a lot going on here and it requires a careful coordination of data across the ecosystem to provide a seamless experience. Capturing all this data, analysing it and generating insights are key capabilities that Insurers require and Informatica has been at the technology forefront of the development of many of these. Ensuring the quality of data and that it is being properly governed are other core capabilities of the Informatica platform. Insurers now have a single platform solution to help with more traditional data management practices as well as new ones to take advantage of the availability of health data.
For the Insurer, they now have a really good picture of an individual’s health and therefore health across a demographic. A deep understanding of health is a highly beneficial component of risk profiling. This will require risk profiling to be run much more frequently to ensure a stable business and early spotting of patterns and trends. Helping keep an individual fit and healthy has direct and tangible benefits for the Insurer as their risk profiles go down and they get a continuous stream of up-to-date data that means they can see when the risk profile begins to change.
Tying financial rewards into the product means individuals can be rewarded for good behaviour whilst behaviour that increases an Insurers risk can be tackled early. By providing tangible encouragement to an individual, the Insurer is not only helping themselves but directly helping the individual at the same time. We all want to stay fit and healthy for a long as possible, now Insurers can help us achieve that.
One Insurer said to me recently that Insurance wasn’t ‘sexy’. They may have a point but we all know something important when we see it and living better and longer is something we are all concerned with. Insurers can really drive home the benefits of their offerings by appealing to a human beings most basic instinct – the instinct to live as well as possible and for as long as possible.
Insurers can’t do the work of keeping us fit & healthy but they can help positively motivate us to head in the right direction.