John Hancock announced that it will now include Vitality offerings with all of its life insurance policies, including converting existing policies to the offering in 2019. The Vitality options include one that offers discounts for health-related data entered via their app or website and another that includes a free or discounted fitness tracking wearable that provides the data. Hancock first offered policies that involved wearables in 2015 when they initially partnered with Vitality, which has run a fitness-based health incentive program in South Africa and the UK for several years.
The move indicates that Hancock and Vitality are confident after several years of collecting fitness-related data that it correlates to healthy habits, at least enough that they are now willing to extend the program. Though some researchers have pointed out that wearable data accuracy could be problematic, the company appears prepared to accept this and embrace the wellness benefits of fitness tracking as part of their overall life insurance philosophy.
As wearables improve accuracy and introduce other tracking capabilities, Hancock may be in a better position to leverage this data than competitors. However, the bigger story may be how the company is using the technology to transform their business model and product offerings. Hancock CEO, Marian Harrison, who moved into the role a year ago, announced that this step is part of Hancock’s shift of focus from providing traditional life insurance protection to one where they have become “the only U.S. life insurance company to fully embrace behavioral-based wellness and leave the old way of doing business behind.”
Wearable and other medical tracking devices continue to have great promise for changing how health and life insurers assess policyholder risk and factors affecting future claims. Hancock’s move shows that some life insurers will be interested in new types of products that factor in ongoing health assessment and possibly continuous underwriting. Most insurers will likely adopt a wait-and-see position and watch how regulators respond to use of wearables data for underwriting and claims, and whether Hancock’s philosophy proves to be a profitable change in how insurance policies are delivered.
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