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Could an Apple Watch lower your insurance premium?

Xinhua, May 6, 2015 Adjust font size:

Wearable devices like the Apple Watch are marketed as having a huge amount of functions, and now there may be one more benefit: reducing your life insurance premiums.

With wearable devices capable of acting like fancy pedometers, insurers are considering providing new policyholders with free devices and rewarding people who can prove they have a healthy lifestyle with a reduction in their premiums, according to a report issued by management consulting firm Accenture on Wednesday.

Wearable devices, embedded with software to collect a huge amount of information including health considerations like heart rate, can help insurers gather more valuable data for analysis and discover associations that an individual might not be able to make, said Accenture.

"While insurers have traditionally based their underwriting and pricing processes on a limited view of certain customer variables, emerging technologies such as wearable and other connected devices can help insurers break from their traditional business models and provide outcome-based services for their customers," said John Cusano, senior managing director of Accenture's global insurance practice.

Nearly two-thirds of the more than 200 insurance executives surveyed by Accenture worldwide said they expected wearable technology to have a significant impact on their industry.

Sixty-three percent of respondents said they expected wearable technology to be adopted broadly within the next two years, while nearly 31 percent said they are already using wearable technology to engage customers, employees or partners.

Wearable devices are gaining popularity globally, especially after the launch of the Apple Watch earlier this year, and China's Ministry of Industry and Information Technology has said it will try to boost the development in the sector.

However, Accenture's report said it can be challenging to manage large volumes of new data collected from smart gadgets. It warned of a mounting risk of personal data being mishandled. Endi