Wearable Technology Utilized by Health Insurance Companies

Currently, health insurance rates vary once a year, but new data and technology show that these rates can fluctuate to match each individual person based on their health. Typically, the older a person ages, the more costly their health insurance and risk is, but with fitness tracking wearable devices, this can all change.

Today, more and more individuals are using wearable technology, such as Fitbit and Jawbone in their daily lives to track physical fitness. Consumers are also tracking mental health such as stress using wearable headbands like Muse. Currently one out of 10 Americans use fitness trackers, but these numbers are estimated to rise in the next decade as more technology is being created to track people’s health. Health insurance companies are trying to create an ethically safe way to dive into the data from these trackers to better determine health profiles for its customers in order to lower risk. The general idea is to better regulate costs considering today’s health care bill is up to $2.6 trillion.

Large self-insured companies such as BP bought Fitbits in bulk to give to their employees for free as long as BP had access to their data. BP used the step tracking data to develop an incentive for their employees to become more active. If an employee walked more than one million steps in a year, then they received points that go towards a lower insurance premium. Basically, that is the direction health insurance companies want to advance toward. For example, car insurance companies already use similar tracking data for vehicles and their customers such as Progressive with their “Snapshot” safe driving program. The tracking device plugs into their dashboard and monitors their driving activity for thirty days, and safe drivers are eligible for a discount. Health insurance would like to set up a similar idea with health tracking apps in which active people who eat healthy have the opportunity for lower premiums and a lower risk for accidents.

“I can see health care going that way. If you can take this wearable and I can see a constant level of activity and constant parameters on fitness activities, I’ll take points off your premium… I can set rates on a daily basis as opposed to just once a year.” stated by Kelly Barnes, who tracks healthcare for PricewaterhouseCoopers.

However, these ideas are still in the works and there are many issues to overcome with privacy, but health insurance and fitness tracking companies are continuing to work on this project in order to lower risk. Wearable technology is becoming more and more prominent in today’s society. By having an in-depth look into a person’s health profile and lifestyle, health insurance companies have the ability to improve their risk management according to each individual. As projects similar to this one continue to develop, we will see how wearable technology affects risk management in a way it has never been able to before.

Click here to learn more about wearable technology in health insurance.


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  1. Fred Summers June 4, 2015

    I like the idea of customized health insurance using new wearable technology. It makes the price more reflective of the person’s health. Since the cost of health insurance is so high anything to help lower it is good in my books. Thanks for the post.


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