Smartwatches Measuring Mortality Risks Are New Tool for Insurers

Smartwatches and other wearable technologies have the potential to change the pricing of life insurance policies by offering better data about individuals’ mortality risk, according to a new report by reinsurance company Munich Re and analytics firm Klarity.

The study uses data from U.K. Biobank, which tracked more than 500,000 volunteer participants over more than a decade to obtain risk insights based on metrics such as daily step counts, minutes of inactivity or vigorous movement, average heart rates and daily sleep duration.

Auto insurance companies have pioneered the installation of in-car equipment to monitor driver behavior in real time, including speed, acceleration and braking patterns — and use the data to offer potentially lower premiums. The wearable technologies could bring the same principles to bear in the life insurance industry, improving underwriting accuracy by combining granular health data with medical histories and lab-tested biomarkers.

Consumers already choose to share their wearable data with apps and fitness platforms every day, Klarity’s founder and chief executive Will Cooper said. He said the potential availability of such data means that “insurers are now able to better stratify risk and enhance underwriting precision.”

The researchers found that people who walk at least 7,000 steps per day experience significantly lower mortality risk, regardless of their body mass index, age, or smoking status. They also found that smokers who hit that daily step-count level have better mortality prospects than non-smokers with fewer than 5,000 steps, and the same applied for obese participants versus those with “normal” BMI.

The use of health data could expand the life insurance market to people who may have been viewed as uninsurable previously — though it could work the opposite way too, by limiting access for others. Instead of traditional fixed premiums, the devices could also shift the market toward customized rates based on frequency of healthy activity.