Telehealth, Smart Homes and Wearables Help Insurers and Customers Thrive

Tech advances coupled with AI can help insurers manage risk, improve underwriting and boost customer experience.

(Image source: Fancycrave1.)

In the wake of the pandemic, people have dramatically changed how they live, communicate, work and shop. COVID has also changed how they interact with critical services such as healthcare and insurance. In a time of change and uncertainty, customers are seeking reassurance and easy transitions to the “new normal.” Insurers that take advantage of the new data and customer insights this global digital shift has provided can better assess customer claims and applications, and deliver a better experience.

Telehealth and telemedicine are booming as medical professionals take their services online. One in five Americans uses a health app or fitness tracker while 69 percent have some kind of smart technology in their homes. These services track a wealth of data, for example, daily steps, sleeping patterns, activity levels, heart rates, calories consumed, UV levels, temperature preferences, when people are home and not, distance traveled in cars and more.

Revolutionary insights

Big Data offers revolutionary insight into a customer’s lifestyle, diet and general health. Access enables insurers to better understand potential risk factors and even offer preventive and proactive recommendations such as encouraging healthy habits to avoid future health issues. Potentially, an insurer could recommend the insured go to an emergency room because of acute risk of a heart attack.

Wearables and fitness-tracking technology have witnessed rapid growth in recent times. International Data Corporation reports that one in every five people in the U.S owns a wearable fitness device. It also estimates that annual shipments will exceed 250 million devices by 2021.

Given the ability of technology to provide critical data, the wearables revolution continues to spark interest in the insurance industry. Data collected from wearable devices can provide critical health and fitness information. This information is vital to the development of interactive life insurance policies that track fitness and health data through wearable devices and smartphones.

Data gathered can be used to give complementary coverage or improved rates (where allowed) for both individuals and employee benefits using health and risk scores.  The technology thus holds the key between insurance firms and technology-savvy clients who value a modern, updated experience and digital engagement.

Wearables can also help insurers mitigate claims fraud and, more importantly, enable them to transmit data to warn customers of possible dangers in real-time. For instance, some IoT wearables can proactively alert diabetics on possible odd joint angles, foot ulcers and excessive pressure so they can get treatment before things worsen.

Life insurance policyholders pay their premiums on average for 20 years. With the adoption and use of fitness trackers, they may be able to lead healthier and longer lives. Lower mortality and morbidity can help insurers boost profits while improving insured health and wellness with predictive care and early diagnosis.

Similarly, internet-connected smart homes can help P&C insurers detect hazardous conditions and reduce losses for homeowners. For example, they could call the homeowner’s phone when a sump pump stops working during a rainstorm or send a text when there’s a break-in.

Managing Data Risks

Use of wearables and fitness devices comes with the risk of infringing on privacy. The insurer has access to private information whenever the customer is wearing a connected device. There’s also the risk of the information leaking to other parties. Insurers and fitness devices must handle personal data with complete confidentiality.

Another challenge is the reliability of the data collected, as the devices may not always report accurate information to the insurer. Devices may be tailored to indicate motion patterns such as walking or running but may not be able to record other activities such as cycling. The elderly may also be victimized by errors, as their exercise regimes may be less demanding.

While wearables create data safety and accuracy concerns, they can be managed with proper protocol. Insurers have always dealt with sensitive information and will need to continue to handle such data with care. For example, studies show that fitness data is evened out over time. A wearable device may not provide an accurate reading of the user’s heart rate during fast-paced or high-intensity exercises, but it can provide a comparable average throughout the workout.

Live customer insights from data sources including telehealth tools, wearables and smart home devices can help offset some of the uncertainties caused by the pandemic and improve the risk assessment process.

AI Completes the Picture

According to PwC, the following are the key areas that AI can help with digital transformation.

A personalized customer experience can:

  • Improve efficiencies and automate existing customer-facing underwriting
  • Enhance and personalize the customer experience
  • Predict what customers need
  • Personalize specific coverage


  • Automating underwriting in property, automobile, commercial, life, and group using IoT data
  • Modeling of new business and underwriting process and blocks of business


  • Robo claims adjusting and payment with fraud detection
  • Build predictive models

Insurers need AI to make the vast amount of big data from wearables and smart homes insightful and fully integrated with claims, quoting and underwriting systems. AI can also help solve the problem of inconsistent data by detecting anomalies that aren’t meaningful.  Some vendors have added AI to their insurtech systems.  There are a variety of companies offering services for property/casualty, life, health and benefits insurers.

Now is the time for insurers to get ahead of this global digital transformation and leverage new data to reshape how they assess, price, and limit risk and enhance their customer’s experience.

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Michael J. de Waal //

Mike de Waal, SVP at Majesco and Founder of Global IQX , is an award-winning, results-driven, and experienced leader with a passion for innovation, technology, and the employee benefits industry.

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