Wearable technology is not tomorrow’s world, it’s today’s. The number of wearable devices shipped worldwide in the first quarter of 2015 hit 11.4 million, up by 200% from the previous year. Apple’s flagship watch is becoming especially popular in the UK, as the nation rushes to embrace an era where consumer analysis is king.

But whether actively or passively, these devices have been collecting consumer data for several years now. This has made many insurers take notice and begin to consider using big data to analyse the metrics on their customers, in the way that “black box” recording is having an impact on the car insurance industry.

The simple fact is that there are very few providers left that do not believe wearable technology is soon to have a significant impact on the industry, with many in the process of drawing up business strategies to incorporate these devices.

A win-win scenario

Reducing the risk of ill-health from a consumer’s perspective is always a good thing. Also, because it lowers the risk of claim for insurers, consumers are starting to benefit from reduced premiums and rewards for staying healthy.

Vitality is one of the providers in the UK leading the way in using this new technology as part of their offering. Their honest assessment of the situation: “It costs us less to look after you. So we can pass those savings back”, is the basis of a reward scheme to empower the consumer through logging counted steps, calories burned and attained heart rates.

Big Brother is watching you

Could insurers use registered data on consumers during the underwriting process, at the time of claim or at the point of sale? Sceptics might assume that this will also mean insurers could increase premiums if your data is negatively impacting health. But so far providers are choosing to engage with customers through encouragement and empowerment first, before risking negative media.

Not just the amount, but the accuracy of the data will also need to be carefully assessed, to ensure that there has been no black hat techniques used, such as physically manipulating the devices. These issues will no doubt become more complex and it is important that an honest and transparent approach is taken by both consumer and provider alike.

The beginning of a beautiful friendship

Could this be the beginning of a new, stronger relationship between consumers and providers? Providing consumers with free technologies to monitor fitness and health could help to open up a long-term interactive consumer engagement where rewards and discounts are on offer, especially those that lead towards a possible premium discount.

There is of course still some scepticism as to how much providers could and should utilise consumer data, but empowering consumers with the ability to have real-time engagement with their policies may just be the link that bridges the protection gap in the UK. One step at a time it seems needs to be taken from both consumer and provider, as wearable technology weaves it way into industry view.