Life Insurer Peers Into Customers' Health Habits Through Their Watches

Australians who commit to wearing an Intel smart watch and hitting exercise goals can earn discounts of up to 10 percent off their insurance premiums.
By Mary Catherine O'Connor

Prior to developing MLC On Track, BCA had already been working with Intel—which acquired the watchmaker, Basis Science, in March 2014—to use Basis watches in developing and testing its data platform, called COVALENCE. Bewley says that while COVALENCE is device-agnostic, the Basis watch generates a rich data stream that "makes it better than other wearable devices from a data-analytics perspective." Basis tracks body temperature, ambient temperature, skin perspiration and movements. A third-party study showed that the accuracy of the watch's optical pulse-rate monitor is comparable to that of an EKG machine, Bewley reports.

Before each new customer can begin logging data from his or her new Basis watch into the MLC On Track program, that person must register via an online enrollment form. Here, BCA presents details of the program. The customer must consent to MLC's privacy and data-sharing policies, and he or she completes a survey that includes questions about that person's age, gender, exercise regimen and medical history. The customer then starts to use the watch, which synchs to the Basis app running on the user's smartphone or computer, via a Bluetooth connection. From there, the data is encrypted and forwarded to the cloud, where BCA collects it. "Then the data starts to flow into our platform," Bewley states.

Customers who reach specific health goals receive up to 10 percent off their annual insurance premiums.
BCA employs an algorithm to create a unique profile based on each user's biometrics. That profile is designed to prevent a customer from attempting to fool the system by giving the watch to someone else to wear while exercising. If the COVALENCE platform detects that someone other than the insured is wearing the watch, Bewley says, it flags the account so that MLC can investigate.

BCA charges MLC a monthly fee based on the quantity of devices from which it is collecting data. To date, MLC says, it has enrolled thousands of customers into the MLC On Track program.

According to Bewley, COVALENCE provides more than just a straight log of activity per user. "For the insurer, we do population segmentation—that is, cohort grouping based on behavior," he explains. "So who are the individuals who have low sleep, are highly sedentary, or have a high resting heart rate? We do the same for runners, walkers, etc. Then we get into more advanced calculations, such as stress scores." Such scores evaluate an individual's exercise, recovery periods and sleep patterns, as well as how these can impact his or her overall health.

The benefits that the insurer seeks from MLC On Track include better visibility into its customers' habits and health, which should lead to more appropriately priced premiums, as well as better customer engagement, which should lead to longer customer retention. In a prepared statement, Fiona Guscott, MLC's chief underwriter, said, "By identifying new ways to assess and price insurance risk, we can cut costs for everyone involved. More importantly, as we reward healthy decisions, we can all work to achieve the greater goal of prioritizing wellness."

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