North American life insurance company John Hancock, in a statement on Wednesday (10 September), said that the company will stop underwriting traditional life insurance and will only sell policies tracking fitness and health data through smartphones and wearable devices, reported Venturebeat.
John Hancock is a 156-year-old insurance company and is owned by Canada’s Manulife Financial. This move is a major shift in the way company functions as this model will be applied by the company in all of its life coverage policies.
The Vitality group, partner of John Hancock, was the company to pioneer interactive life insurance which are widespread schemes in Britain and South Africa and are now gaining popularity in USA.
Interactive life insurance, pioneered by John Hancock’s partner the Vitality Group, is already well established in South Africa and Britain and is becoming more widespread in the United States of America.
In this scheme, policyholders are incentivised with discounts and gift cards for adopting healthy exercise targets and food purchases, which are tracked on wearable devices like fitbit or apple watch, and logging them on an app.
The company benefits hugely from it as its healthy customers live longer, which means more premium collection and paying less claims.
However, consumer and privacy advocates are wary of the insurer using data to track consumers who are most profitable while hiking rates for those who do not participate in the programme. The company on the other hand said that the insurance field is too heavily regulated for Insurance companies to hike prices.
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