Imagine your plight when you figure that despite being a regular at marathons and being fit, you land up paying about the same premium on your health insurance as your twin who is on the heavier side and not as fit as you are? In the absence of data on fitness and health in general, health insurance has been on offer on two counts – standard health, standard rates and non-standard health, where a loaded premium is available. There is also a third category, where insurance is denied on grounds of poor health. There is however no way that someone can claim a discount on grounds of superior fitness.
Things are changing as a working group setup by IRDAI is examining innovations in insurance involving wearable and portable devices has come out with recommendations which pave the way for the companies to provide incentives such as discounted premium based on customer’s health and activity data. Such a facility is already available in the west and other developed countries. And, once this group recommends a move for allowing discounts on grounds of healthy lives, it will change the way health insurance is perceived right now.
Even now, certain corporate insurance cover offers such facilities where instead of discounting premium, the insurer facilitates membership to gyms and also provides fitness trackers as incentives for one to go healthy or maintain their health. Such a move has the potential to discount renewal premiums by 10-20 per cent. It will also help in building a massive database on health parameters of those using trackers for studies and evaluation of health policies and features.
The move will also help insurers reassess and monitor the risk on individuals who they have insured, because there is no way to check how a policyholder is faring once they have a policy. Tracking data from devices can change this scenario and also help both the insurer and the policyholder to step in when necessary to improve their health status. With better data, insurers may also be able to work on new products that can be customised based on how a policyholder’s health situation is changing with their age.
Already in the case of motor insurance, telematics and IoT (Internet of Things) is changing the way claims are assessed and settled. With devices getting cheaper and data being easy to track, health insurance could get the necessary fillip and prospective policyholders could look forward to having access to insurance to help them know their health status better. Here is another technology invasion in the financial services space, which has all the necessary ingredients to drive health insurance penetration.