We are currently living in a world surrounded by technology. From our computers to our phones to our…wrist watches? That’s right, technology is now wearable and it allows us to track our lives in ways we never thought possible. Wearable technology like the Fitbit or the Up band is not the only place where we are seeing new breakthroughs; we can even find this evolution in our own vehicles. Known as telematics, many vehicles have a plug-in tool that is used to track driving habits and performance. Even the thermostat, which has been around since the early 1800’s, has now evolved into something that can learn our habits and make not only our homes, but our lives more comfortable. The Nest, for example, is an amazing home companion that can monitor our living habits, adjust to our lifestyle and even keep track of humidity and moisture levels in our home. Some of this technology goes further to monitor how often we are changing the batteries in our smoke detectors. All of this information allows insurance companies to mitigate risk by monitoring fitness of a subscriber, driving habits of an insured and even understanding the living habits of a homeowner. It can also tell us how ‘green’ our habits are.
Us…that’s another point in this all of this. It is all about us – rather, me. ME, ME, ME! Technology fits into our pockets, our homes, our cars and it conforms to our lifestyle. The millennial generation is using this technology at an ever-increasing rate. So, how can insurers cater their products and services to leverage the technology that fits into the lives of today’s millennials? The answer has been termed a ‘mobile moment,’ meaning that insurers only have a single opportunity to catch these users. If, in that moment, the insurance company can give millennials exactly what they are looking for, millennials will continue to look to that same insurer for the answers to all of their questions.
The choices that we, as millennials, make every day are exactly that, ours. We choose to walk 3,000 steps or 13,000 steps; we choose to drive the speed limit or 15 over; and finally, we choose to keep track of this information or ignore it all together. This isn’t about an insurance company making more money or even an individual saving money. This is about our world having an influx of information without the ability to actively interpret it. Technology bridges that gap and interprets our behaviors into measurable data – all while allowing us to keep better track of actions that we may think we don’t have time to monitor. Another question is about the monitoring of this information. Who is storing this information, where is it being stored and how secure is it?
All of this new technology is constantly gathering information, from monitoring our movement throughout the day to the temperature we like our homes at the end of that day – but what does all of this mean? Insurance companies are asking themselves that very question. There is already a plethora of information available, but the issue is that insurers need to utilize it in a way that will allow them to better serve clients. Progressive Insurance has begun to utilize telematics to track customer behavior, citing that, “from an insurance perspective, what is new and different and critically important about this data is that it can provide a much more accurate picture of the exposures, hazards, and risks of what is being insured” (Bender and Hanna). This information will not only help the insurance company better predict losses and mitigate risk, but will reduce the overall costs to policyholders. How? By reducing their premiums, which will now be reflective of their behaviors and actions that, in turn, will lower risk for the insurance company. This trend is also being seen across other industries, like healthcare. Please take a look at how wearables are revolutionizing the healthcare space in “Fitness Tracking, Healthcare’s Best Friend” by my colleague Donna Jolly.
So, what does all of this mean? We are living in a very exciting time, where we can choose how we live and keep track of our lives. Millennials are utilizing this technology at an alarming rate but who will they trust to keep track of their lives? This generation already knows that the Apple Watch will be the next big thing. How will you use it?