On Monday, November 13, the National Association of Insurance Commissioners, in conjunction with the Center for Insurance Policy and Research and The Griffith Insurance Education Foundation, presented a webinar entitled “Wearables and their Insurance Implications.” The webinar covered a broad range of developments in the wearable space, as well as implications – both positive and negative – that may result from the proliferation of wearable devices. As a baseline, the speakers laid out the potential benefits that wearable devices may yield for insurers: enhanced claims processing and underwriting and improved ability for insurers to monitor insureds’ health and wellness, among others. With each of these benefits, however, come potential business and legal risks. For example, the aggregation of wearable device-generated data by insurers presents significant privacy and cybersecurity risk. It also raises questions about ownership of the data.
Overall, the webinar presenters generally presented optimistic, albeit occasionally skeptical, tones about the increasing use of wearable devices for the insurance industry. Several speakers stated that they expect the next 3-5 years to be a period of immense change and development, with consumers, regulators and the industry as a whole gaining a better handle on how to use wearables. Specifically, speakers raised questions about the accuracy of wearable device data, as well as the potential for fraud that wearable-generated data may create. Another speaker expressed interest in the extent to which data from wearable devices might become admissible as evidence in potential lawsuits, while another raised a question as to whether existing legal restrictions on the use of genetic data by health insurers may be relaxed in the coming years to allow health insurers to maximize use of wearable-generated data.
We will continue to monitor and report on developments in this space.