One of the largest life insurance providers in North America will no longer offer policies that do not include digital fitness tracking.
John Hancock, one of the oldest and largest North American life insurers, will stop underwriting traditional life insurance and instead sell only interactive policies that track fitness and health data through wearable devices and smartphones, the company said on Wednesday.
Promoting healthy habits is in John Hancock’s best interests — the longer its customers live on average, the more premiums are collected and the longer before it has to pay out claims. As an incentive for customers who may not be motivated to exercise by the idea of living longer, John Hancock is also offering lower premiums, as well as discounts and coupons for other companies, like Hotels.com.
“Policyholders score premium discounts for hitting exercise targets tracked on wearable devices such as a Fitbit or Apple Watch and get gift cards for retail stores and other perks by logging their workouts and healthy food purchases in an app,” reports Reuters.
John Hancock has offered plans with the fitness tracking option since 2015 and has already provided more than $2 million USD in rewards from other companies. The insurance company also offers financing for wearables such as the Apple Watch and Fitbits. If a customer hits their exercise goals consistently, they can get the wearable for free, but if they fall short, the payments for the device scale up to $15 USD a month.
In the meantime, it gets a trove of data on policyholders, while deepening its relationship with clients. The information John Hancock collects could make it easier to direct life insurance customers toward other company products, such as retirement plans.
“We would engage with our customers one or two times a year, basically privacy notice and a bill, and that’s it,” said Marianne Harrison, John Hancock’s CEO. “Now we’re engaging with them on an ongoing basis, and establishing a relationship with our customers — something we really never had before.”
But privacy advocates have warned that insurers could use tracking data to punish customers who fail to meet targets.
“Naturally the American dystopian surveillance state will combine insurance with fat-shaming. Welcome to hell,” said Matt Stoller, a fellow at the Open Markets Institute.
Update Sept. 21: John Hancock emailed to clarify inaccurate information regarding their policies. The company stated in an email, “John Hancock is requiring everyone they insure to join the Vitality program but the actual fitness tracking part is completely an opt-in option. Each person who is insured is able to include as much information as they choose.”