Using Wearable Data for Accurate Underwriting

Wearable technology in healthcare is more than just a trending fad. The COVID-19 pandemic and the ensuing global lockdowns catalyzed multiple developments across the healthcare and wellness sectors. Increasingly, people are adopting new health regimens and quantifying health benefits. Wearable devices in healthcare have emerged as a significant growth driver. As the technology becomes more widely adopted, wearable data in underwriting is expected to become more prevalent. 

According to Insider Intelligence, US consumers’ adoption of wearable technology in healthcare surged from 9% to 33% in four years[1]. The CSS insight report estimates that the sales of wearable devices in healthcare will catapult to 380 million units by 2025[2]. The vast amount of data generated by these devices include information on an individual’s activity levels, sleep patterns, heart rate, and more. It gives a complete picture of an individual’s health and lifestyle and can help create personalized insurance coverage.

What is Wearable Technology?

Apple Watch and Fitbit are probably the best-known wearable devices in healthcare. Also referred to as “wearable tech” or simply “wearables,” wearable technology in healthcare uses tiny devices to gather and monitor health data. This category of products includes smartwatches, fitness trackers, and garments with integrated sensors. They can measure step count, heart rate, and sleep habits, among other variables. 

Wearable devices in healthcare provide a slew of fresh ways to monitor health and can help modify our lives. Healthcare providers can evaluate the acquired data to provide insights into one’s health and fitness and generate personalized suggestions. With the rising interest in monitoring and regulating health, wearable devices have become increasingly popular. As more firms enter the market, creating new technologies, the industry is estimated to expand. Data collected from wearable medical devices also have the potential to revolutionize related industries, like the underwriting industry.

Using Wearable Technology for Underwriting

Data collected from wearable health technology can supplement traditional underwriting methods for individual policies, such as medical exams and health questionnaires. The result would be a more comprehensive view of an individual’s health status and risk factors. Based on this understanding, the insurer can adjust an individual’s premium or determine their eligibility for certain types of coverage.

Additionally, wearable technology in healthcare can track an individual’s adherence to a treatment plan, helping adjust their coverage or premium. In short, wearable devices provide valuable data for insurance companies to underwrite coverage and more accurately assess an individual’s risk. Wearable technology in healthcare can contribute to several types of underwriting, including:

  • Life insurance
  • Health insurance
  • Disability insurance
  • Long-term care insurance
  • Annuity

How Wearable Data Aids Insurers

Faster underwriting: Insurers can use wearable healthcare device data to analyze applicants’ lifestyles with consent. Customers with favorable data can progress swiftly to the best classes, while those with poor data may need additional levels of qualification or qualify for regular rates. Combined with a predictive model and automation, this strategy reduces issue time from days to minutes [3]. Wearable data can reduce the time for manual underwriting processes and the high costs of simplified issue plans. 

Insightful underwriting: Wearable devices can enhance healthcare data and reveal several risk characteristics. Step counts, resting heart rate, sleep time, and sleep quality have been linked with health and mortality outcomes. These factors help categorize risks like BMI, blood pressure, cholesterol, and family history. As knowledge grows, mortality risk prediction models for insured life will integrate data from wearable medical devices. Wearable data and AI help understand mortality risk and personalize life insurance premiums.

Continuous engagement: Wearables allow life insurers to communicate with policyholders regularly. Life insurers and policyholders become health partners who interact better. Insurers can help customers make better choices. They can motivate and steer policyholders through wearables. They can also help people meet their health goals and notify customers and insurers of possible problems. In short, they can align the insurer’s and the policyholder’s interests. Healthy behavior increases policyholder lifespan and insurer profitability.

Inclusive insurability: Finally, healthcare wearable technology improves risk-based pricing. They improve insurability by giving mediocre applicants better offers. Most programs today cherry-pick the healthiest people. Protection insurance is for better health, and an inclusive underwriting process can help ensure this. Wearable gadgets can also empower unhealthy people to make small but important changes and relates insurance cost to behavior they can control.

How Wearable Data Supports Underwriting

Insurance companies can use data from wearable technology in several ways to support underwriting, such as:

Identifying high-risk individuals: Wearable data can help identify individuals with a higher risk of developing certain health conditions based on their physical activity, sleep patterns, and other health metrics. 

Underwriting with real-time data: Wearable devices can provide real-time data on an individual’s health. For instance, a heart disease patient’s premium would change if a wearable device detects an irregular cardiac rhythm.

Personalized policy and pricing: Insurers can also use wearable data for policy underwriting by creating personalized policies and pricing for individuals based on their unique health profiles. For example, an individual who is highly active and has a lower risk of certain health conditions may receive a lower premium than someone less active and at a higher risk.

Wellness incentives: Some insurance companies are using wearables to offer wellness incentives for policyholders who meet specific health goals, such as increasing their physical activity or improving their sleep quality. As a result, it encourages healthy behaviors and reduces healthcare costs.

Claims management and fraud detection: Wearable data can be secured using trust architectures and used to verify claims and better detect fraud in the insurance industry. For example, if someone claims accident wounds but wearable data shows high-impact activities, the claim can be further scrutinized.

Wrapping Up

According to a Deloitte report, 59% of US individuals who own and use a fitness tracker, smartwatch, or both track their steps, 42% track their exercises, and 37% track their heart health[4]. Wearable devices will become as commonplace as mobile phones in the coming years, at least among the health-conscious. They will be inconspicuous in our daily lives, give useful instantaneous input, and connect to other gadgets and service providers, including our insurance company. Wearables provide the ideal opportunity for traditional insurers to innovate, revolutionizing the management of avoidable and chronic diseases while providing better rates and risk segmentation.


  1. Intelligence, Insider. “Latest Trends in Medical Monitoring Devices and Wearable Health Technology (2023).” Insider Intelligence. Accessed January 14, 2023.
  2. CCS Insight. “Good Times for the Smart Wearables Market – CCS Insight.” Accessed January 14, 2023.
  3. Accenture. “AUTOMATED UNDERWRITING: Breaking the Rules to Spark an Underwriting Revolution,” 2020.
  4. Deloitte Insights. “Mastering the New Digital Life: Connectivity and Mobile Trends Study, 3rd Edition,” August 2, 2022.



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