Wearables to transform insurance industry

Connected technology, such as wearable devices, are set to transform the insurance industry, according to new research from Accenture.

The consultancy firm’s survey of more than 200 insurance executives found that nearly two thirds (63%) of insurers expect that connected devices will be adopted across the insurance industry within the next two years.

Applications for this technology range from using fitness bands to monitor health and activity – tipped to be heavily adopted by the health insurance industry – to ‘black box’ technology installed in cars to allow insurers to reward customers for safe driving.

John Cusano, senior MD of Accenture’s global insurance practice, said: “Insurers have traditionally based their underwriting and pricing processes on a limited view of certain customer variables.

“But emerging technologies such as wearables and other connected devices can help insurers break from their traditional business models and provide outcome-based services for their customers.

“One leading insurer recently announced that it will provide new policyholders with a free fitness band to track their health progress, and then reward healthy living with a reduction in life insurance premiums.”

The report said that although insurers are struggling to manage and analyse the volume of data produced by technology, with over half (56%) describing it as extremely or very challenging, almost three quarters (73%) also say a personalised customer experience is a top three priority.