Articles - Wearable technology – what’s in it for me?

Wearable technology has been the subject of much discussion over recent months, particularly within the life and pension industry, as its use for the purpose of risk assessment has been explored. The arrival of the Apple iWatch in the market has lifted interest in this technology to new heights. The focus of these discussions was initially around the ability to use wearable technology to more accurately underwrite lives at the new business stage.

 By Tom Murray, Head of Product Strategy, Exaxe
 The relatively straightforward asked people to use wearable technologies for a limited amount of time in order to get accurate pricing on the financial protection product that they requested.
 The conversation has now expanded to look at the whole area of employee health and, in particular, the possible advantages of using the information gathered from wearables both for the purpose of improving employee performance and for risk assessment, for the purpose of employee benefit schemes. This, however, would mean that the individual will be committing to giving the employer, and the benefits provider, large streams of data over the period of their working life. It also raises far more significant issues of privacy.
 There are many questions both regarding the propriety and the practicality of how this might be done. Will employees accept the idea of being monitored both inside and outside work with the results being available to their employers? Can they be confident that the information will not be misused to alter their career path, or even end it? Can they be sure that the data will be secure and restricted to those whom they have agreed can have access to it?
 Answering these questions is crucial to persuading employees that they can trust the employer and the benefits provider with the information. Keeping your employees healthy, and thereby increasing productivity, and reducing sick leave would appear to be an excellent thing for both employees and employers. An accurate risk assessment should enable benefits to be more finely tuned to the employee needs and priced correctly for the benefit provider. This, one should imagine, would be a win-win-win situation for the employee-employer-provider alike.
 However, it is going to take more than promises of an early health warning, and possible minor increases in their benefits package for the employee to be convinced that handing over such a considerable level of their personal data to their employer is worth it. Giving that much information to the employer would require a major offsetting benefit if employees are to be interested in participating in this kind of programme. And to date this is lacking.
 Journalists have carried out some initial experiments on using wearable technology for the workplace. Even though they had been involved in setting up the experiment, and had volunteered to be a participant, they found that it was slightly unnerving to know that work colleagues had access to large amounts of data on their sleep patterns and activity levels, and were assessing them based on this data.
 The main problem for the users was that there was little in it for them. Sure, they got a free medical assessment of how they were, but they could have paid for that themselves, and kept their data private. Their main fear was that the information would be misused or misinterpreted in some way that would damage their career prospects, and that fear far outweighed the perceived benefits. Employers, on the other hand, are attracted by the idea of maximising performance and paying less for employee benefits because they can help optimise the health of their staff.
 Of course, wearable technology might be a double-edged sword here that could sweep back and cut the employer. Employees deemed to be stressed might be in a position to sue the firm and blame their working environment for their condition as the employer had the information and yet may have done nothing about it. So, firms would need to be careful that when monitoring the health and stress levels of their staff they don’t create as many problems for themselves as they solve. As the old saying goes, don’t ask the question if you don’t want to hear the answer.
 Proponents of the use of wearable technology have forecast that in future managers may have dashboards that show key employee data, such as sleep quality and activity levels, in order to monitor and maximise performance. It is difficult to see how employers will get their staff to do this as the benefits to them are minimal.
 The same will apply with risk factors for the life assurance sector. How many clients of the industry are really prepared to be monitored that heavily in order to have this assessment made? What’s in it for them? A lot of people will still resist such a severe intrusion into their privacy, as there are clearly insufficient pros for them to put up with the scale of the information being surrendered.
 It seems to me that wearable technology is still a solution in search of a problem, and that the future of it will become clearer if there is a definitive bonus in it for the wearer. Until then, the use of wearable technology will probably be restricted to those who are tech-fashion victims, and the general population will continue to resist.

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