Nearly two-thirds of insurers expect that wearable technologies will be adopted broadly by the insurance industry within the next two years, according to a recent survey by global consulting firm Accenture plc.
The firm surveyed more than 200 insurance executives, including some Canadian respondents, as part of its annual Technology Vision report.
The results suggest that the adoption of wearable technology is expected to comprise one of the most significant developments for the insurance industry in the next few years. Nearly one-third of respondents said they are already using wearables to engage customers, employees or partners, and 63% said they believe that the technology will be adopted broadly by the industry in the next two years.
One insurer that has recently embraced this technology is Boston-based John Hancock Life Insurance Co., a subsidiary of Manulife Financial Corp. of Toronto. In April, it launched a new life insurance program that incorporates wearable technology, allowing clients to qualify for lower insurance premiums when they demonstrate that they are taking steps to improving their health.
(See Insurance: Embracing technology)
The adoption of wearable technology is part of an effort by insurers to create personalized experiences that engage consumers. Nearly three-quarters of the executives surveyed said that providing a personalized customer experience is one of their top three priorities within the organization, and half claim to already see a positive return from their investment in personalized technologies.
“While insurers have traditionally based their underwriting and pricing processes on a limited view of certain customer variables, 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,” said John Cusano, senior managing director of Accenture’s global insurance practice.
As insurers gain access to large volumes of new data, however, they are also facing new challenges. More than half of the executives surveyed said that managing data is “extremely challenging” or “very challenging” considering the changes in volume, variety and velocity.
The survey results suggest that many executives are experimenting with new software and technology to help them manage and decipher their data, and many plan to engage with business partners on digital initiatives in the next two years.