Big Data's Big Guns: John Hancock
For a long time, life insurers danced around the issue of how wearable technology could impact the way they evaluate the riskiness of applicants. But the technology was of clear interest to an industry that has struggled to attract new buyers due to its typically onerous underwriting process, involving collection of blood and urine samples as well as a long wait time.
“It bothered me that we asked for so much information — practically inches and inches of paperwork — and at the end of the process all you get is your risk classification,” says Brooks Tingle, SVP of insurance marketing and strategy for John Hancock “For all they’ve given us, we don’t give them a whole lot of insight.”
So Tingle and his team set out to find a way to leverage the wealth of data collected by wearable technologies, including the popular FitBit and recently released Apple Watch, to give something back to their customers. The end result was John Hancock Vitality, a new life insurance product that offers up to a 15 percent premium discount to customers who track their healthy habits with wearables and turn that information over to the insurance company. New buyers even get their own FitBit to begin tracking.
“Life insurance underwriting had always been a one-time event — the insurance company had only one opportunity to assess you,” Tingle says, which he says scared off some people from even bothering to apply. But now with the potential to improve their rate as they improve themselves, “customers don’t mind giving up some data if you’re transparent about what data you’re asking for, and they’re getting real value back for it.”
It’s a watershed moment for life insurers, Tingle explains, because the industry is drastic need of revitalization.
“The ability of this data, and predictive modeling, to offer the client a more streamlined and more personalized underwriting process, is crucial,” he says. “We’re thinking: How do we reinvigorate things not just for John Hancock but for the industry, and make our solutions more relevant to the consumer?”