The wearable device industry has exploded into a vast range of devices with a variety of different functions since the first 'smart' watches emerged in the late 1990s that enabled the tracking of steps. They have now become part of our daily lives, and the intelligence that can be gained from the data these devices collect has massive potential in many areas. One of these is the health insurance sector, where fraud, among other issues, is an on-going challenge.

Insight gathered from wearable devices can ensure that premiums are accurate according to risk, detect potential health problems based on data readings, and even dispense life-saving medication on demand. Connected wearables have the potential to revolutionise the medical sector, including health insurance, and the future holds some exciting developments in this space.

Today, there are many different types of wearables available, including watches and jewellery that track heart rate, activity, sleep patterns and more at all times. They are increasingly widely adopted, and health insurance providers are beginning to gather and utilise the data they provide for a number of different purposes. For example, users can be rewarded based on their activity levels and perceived health status. However, the potential for wearables goes far beyond the current usage.

The next evolution is the launch of smart clothing, enabled by the development of stretchable electronics. This includes socks that can analyse your gait and shirts that can tell if you have been smoking as well as many other things.

This can, for example, monitor the core body temperature of athletes to ensure they do not overheat, check blood pressure to identify possible illness or warning signs, or help insurers to adjust their premiums more accurately based on risk. There are even new implantable devices emerging that can monitor blood sugar and inject insulin when needed.

What all of these devices have in common is the fact that they gather data, which is then sent to a central location for analysis. The power lies in this data, and for insurers it means that the gap between reality and claims can be minimised. Smart devices can detect and monitor all movement and changes to the body and can for example tell if a person is going to have a heart attack before they do. The subtle signs the body gives can be tracked and analysed, enabling more proactive healthcare.

They can also prevent many instances of health insurance fraud. Enrolment into a medical scheme includes a health questionnaire but verifying this data and ensuring it remains accurate is a challenge that wearables can easily solve. In addition, wearables can help to prevent claims leakage. Medical aid claims are paid out based on the bills of healthcare providers, however, at present there is no way of verifying services provided and equipment utilised.

Doctors with wearables can be monitored and tracked, for more accurate billing. Data that is captured through wearables can help to prevent fraud in any area, helping to create authenticity. This can revolutionise the health insurance industry, ensuring premiums are fair and claims are accurate from both sides.

However, expecting hospitals and healthcare providers to embrace this technology is naïve. The move toward wearables needs to be driven by the medical aid providers and insurance companies, as the data gathered is in their best interest in all areas.

Wearable technology can help to create behavioural change in people, because if they know they are being monitored they will be more accountable for their actions. It can also change the way insurance is provided and how healthcare is operated, revolutionising this entire sector.

* By Kumar Utpal, Regional Sales Manager – Banking and Insurance at In2IT Technologies.