Apple and the future of the insurance industry

Apple’s growing recognition as a provider of reliable, secure, high-end solutions means it is entering the insurance industry value chain.

Apple, Apple Watch, iOS, insurance, health insurance, digital health
Apple

The “augmented human” concept has become a reality. We carry health sensors on our wrist, and our Apple Watch is becoming our personal physician. These concepts are transforming the insurance industry.

Risk assessment

Life is a risky business. Insurance is the business of extracting profit through the process of underwriting such risk. And it’s changing right before our eyes.

You already pay less for insurance if you are a safe driver. In the future, autonomous vehicles will extend these benefits even further with collision detection and accident prevention systems, minimizing risk.

In theory, connected vehicle insurance should become cheaper than the fee you pay to drive a car yourself, reflecting the reduced risk.

Autonomous vehicles may be the future, but Apple is transforming the insurance industry in the here and now.

Cybersecurity insurance

Apple CEO Tim Cook joined Cisco CEO Chuck Robbins at Cisco Live to reveal the firms are working to deliver lower cost cybersecurity insurance to customers who choose to use Cisco equipment in combination with Apple kit.

"If your company is using Cisco and Apple, then the combination of these should make that insurance cost significantly less for you than it would if you were using some other personal network side and the other operating system in the mobile area," Cook said.

The idea is that insurers will be persuaded to deliver lower premiums to enterprises that standardize around Apple/Cisco solutions.

Those who do will not be required to subsidize those who choose to use less-secure combinations.

Wear an Apple Watch, reduce health insurance costs

I predicted long ago that as Apple refined the capabilities of the Apple Watch, it would get to a position where insurers would want to provide the device to customers.

One of the first to do this was Vitality, which offered subscribers to its health or life insurance plans a discount Apple Watch. The watch works with the insurer’s tracking systems so that the more healthily active you are, the lower your insurance costs become.

Now it seems we are about to see a similar deal from U.S. health insurance giant Aetna. Aetna already offers Apple smartwatches to 50,000 employees within its corporate wellness scheme. It has allegedly been meeting with Apple and chief medical officers from hospitals to discuss giving an Apple Watch to 23 million health insurance customers

It’s a little like the cybersecurity and connected car insurance deals we looked at above: Those who maintain agreed health, fitness and activity levels as assessed by the watch will enjoy lower insurance costs. They will not be asked to subsidize other people’s bad habits.

Financial technology disruption

This looming disruption of the insurance industry is a prelude to the third wave of fintech disruption as connected devices, new payment systems, blockchain enhancements and so on create new opportunity for new companies and services in the space.

Even something as prosaic as contents insurance could benefit from smart devices — think about a HomeKit-based smarthome insurance package in which intruder detection systems connect with other smart objects in the home to alert authorities when a burglary, flood or other incident takes place.

Personal accident, travel, employment — almost any form of insurance in which a connected device may make a difference will eventually see similar deals.

It also seems inevitable that use of these solutions will slowly become mandatory.

Employers will look to such connected health insurance deals as a way to provide legally required employee health coverage at lower premiums, and they will demand employees wear these devices and adhere to certain fitness levels to keep their jobs.

Questions remain, though. At what point does the distinction between personal and professional life kick in? When can an employee take their smartwatch off? Who owns the data created by these systems? Who is at fault if such information leaks, or is sold, and this impacts the life of the user in a negative sense? Finding answers to questions like those should keep the lawyers busy for a while.

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