Apple and the future of the insurance industry

“The ‘augmented human’ concept has become a reality. We carry health sensors on our wrist, and our Apple Watch is becoming our personal physician,” Jonny Evans writes for Computerworld. “These concepts are transforming the insurance industry.”

“Life is a risky business. Insurance is the business of extracting profit through the process of underwriting such risk,” Evans writes. “You already pay less for insurance if you are a safe driver. In the future, autonomous vehicles will extend these benefits even further with collision detection and accident prevention systems, minimizing risk.”

“I predicted long ago that as Apple refined the capabilities of the Apple Watch, it would get to a position where insurers would want to provide the device to customers,” Evans writes. “One of the first to do this was Vitality, which offered subscribers to its health or life insurance plans a discount Apple Watch. The watch works with the insurer’s tracking systems so that the more healthily active you are, the lower your insurance costs become. Now it seems we are about to see a similar deal from U.S. health insurance giant Aetna.”

Read more, including discussion of how Apple can lower rates for cybersecurity and other types of insurance, in the full article here.

MacDailyNews Take: As we wrote last September:

Next we need a way for Apple Watch to detect smokers and charge them more, too. People who make the effort to be healthy, regardless of whether they actually are lucky enough to be healthy or not*, should pay less for their health insurance as they tax the system far less than those who are sedentary, obese and/or smoke. Just as life insurance costs more for those who live unhealthy lifestyles, their health insurance should cost more, too. (Life insurers should utilize Apple Watches in much the same way.)

*If a person is obese for reasons beyond a sedentary, unhealthy lifestyle, who is actively trying to be healthy as shown by their Apple Watch, but other conditions prevent fat loss (Hypothyroidism, Cushing’s syndrome, hormonal imbalances, Syndrome X, medications, etc.) they should get a lower rate than those who are simply leading sedentary, unhealthy lifestyles. Most cases of obesity are due to sedentary lifestyles and consuming more calories than required, not medical conditions.

Read more here.

SEE ALSO:
Apple and Aetna hold secret meetings to bring Apple Watch to the insurer’s 23 million members – August 14, 2017
In major win for Apple, Aetna becomes first insurance company to subsidize Apple Watch – September 27, 2016
New ‘SweatCoin’ iPhone app pays people to get fit – May 5, 2016
Why you’ll wear an Apple Watch to keep your job – March 14, 2016
Share your fitness data for an Apple Watch – or cash – March 2, 2016
Tim Cook hints Apple might build a health device – November 10, 2015
Apple should double down on Apple Watch’s health sensors, battery life, and waterproofing – October 2, 2015
Health insurer will charge more for lazy people, less for active people, based on Apple Watch sensors – September 18, 2015

10 Comments

  1. Problem is the Insurance industry is not doing this for us.
    They will use the data collected to identify health anomalies and use that to find a way to reject you for coverage as soon as you become a risk. Heart murmur your out, sleep apnea you’re gone. We will only insure people in perfect health.

  2. I would have thought that insurance companies are unlikely differentiate between somebody who is less heathy because of medical issues and somebody who is unhealthy because of poor lifestyle choices. All they will see in either case is a poor risk compared to somebody who is healthy and will adjust the costs of insurance according to the risks that they see, not the reasons behind those risks.

    Obviously it’s better that people do adopt a healthy lifestyle and they will benefit from doing so, but I would be very surprised if an insurance company were to reduce their rates for people who are trying to live a healthy lifestyle despite having an adverse condition. Of course I’m sure that they wouldn’t hesitate to increase the rates for any measurable negative lifestyle choices which they can identify.

    1. Not to mention that some of the unhealthy choices people make are poor attempts to make up for the lack of proper mental health care, which many insurance plans are terrible at providing.
      People with good mental health care are less likely (not never!) to be drawn towards smoking, alcohol abuse, eating disorders, and other problems.
      It’s important to understand that mental health IS physical health. The brain is a physical part of our bodies. People are no more culpable for mental health issues than they are for catching a cold.
      Perhaps the asterisk part of MDN Take could add something to acknowledge that? It seems like it fits with what the Take is trying to say.

  3. The point of insurance is not that healthy people pay for sick people. The point of insurance is that you pay when you are healthy in order to reduce your own financial risk when you eventually become sick.

    The ideal way to do this would be simply to save your own money, to put it aside while you are healthy so that you have a fund to draw on when you need medical treatment. This would work perfectly, if you knew exactly when you were going to need it and exactly how much it was going to cost. But there’s no way to know this, so everyone faces a risk. What if I become sick before I have enough money set aside? What if I get some sort of cancer that’s horrifically expensive to treat? Hence the need for insurance.

    The point of health insurance is not to provide health care. The point is to hedge against financial risk. It is a form of finance. You still set aside a certain amount every month, as you do with savings, but you control for the short-term risk of needing your benefits before you have fully paid for them. Some people will pay premiums for only a few months before they need the benefits. Others will pay for decades without needing them. You accept this because you don’t know ahead of time which one of those people you are going to be.

    But you can make calculations about which one of those people you are likely to be. So you want your premiums to be correlated to your own level of risk and not just be a slush fund to be “shared” with others, because that looks a whole lot like getting ripped off. If you find yourself required to pay extremely high premiums while you’re still young and healthy and with a healthy lifestyle, and therefore with a very low risk of using much of your coverage, then you may well decide you’re better off without insurance. The steep premiums you are paying are not justified by the relatively small amount of risk they defray.

    If you want a system that is actually based on involuntary “sharing,” on the outright redistribution of money from one group of people to another—well, there’s a name for that, but it’s not “insurance.” It’s “welfare.”

    — More here via Robert Tracinski, March 10, 2017

    1. What a dystopian nightmare. The point is to spread the cost of healthcare equally across the entire population. Premiums can change depending on some conditions such as age, but not in a draconian fashion. The point of promoting devices such as Apple Watch across large populations is to promote healthier activity, which lowers costs, not as a tool for spying on people.

  4. Once all people get healthy using Apple iWatch, insurance against sickness will no longer be needed; They will stop paying insurance. Insurance companies will lose that income. Therefore, telling people how to get wall runs counter to its profit motive.

    Insurers would lose money even when a lesser number than all are no longer sick.

    So what’s going on here?

  5. MDN: Don’t forget Alcohol use, Jay walking, talking on phone when walking, texting when walking, getting into arguments, working on anything (cars, bikes, etc.) jogging in traffic areas, and the list goes on and on for risky behavior. So, just singling out a few isn’t going to cut it.

  6. MDN, it’s time again to apply your often written Franklin quote on yourself.
    Just how the hell you can suggest penalizing people for legal behavior is beyond me.
    Insurance is most definitely not making each customer a profit center.

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