Soon, fitness bands, IoT devices may decide insurance premium

Smart devices, or IoT-enabled devices such as fitness bands that monitor your daily activity and speed trackers in vehicles, could soon play a part in deciding your insurance premium. A report by a working group set up by the Insurance Regulatory and Development Authority of India (IRDAI) has batted for the use of wearable devices for life insurance and health insurance policies as they can provide a regular stream of data about the policy holder. "Insurers may develop frameworks/models using wearable data throughout the life cycle of the insured and help in building attractive product propositions, and also monitor experience throughout the policy term," the report noted, adding that for health insurance such devices can play an equally crucial role as insurers, at present, only have a point in time data through medical tests or self disclosures. The working group to examine innovations in insurance involving wearable or portable devices was set up in January this year, and has examined a range of devices, including fitness bands, skin patch sensors, smart contact lenses, medical e-textiles and even implantable devices. Similarly for non-life insurance, such as motor cover, the report noted that the use of IoT devices and Artificial Intelligence would not only help improve assessment of underwriting risk by tracking the driving habits of the insured, but can also lower fraud risk and improve claim handling.