Apple Watches and Fitbits are increasingly part of everyday life. People track daily steps, log health information, even use the devices to compete against friends and family. Now life insurers want in on that.

John Hancock, a unit of Manulife Financial Corp., recently expanded an optional program to d for healthy habits. Participants can earn points for tracking their daily jogs or for their meditation practice, and then use those points for rewards toward purchases on Amazon and other sites. Sometimes they can even save money on premiums.

What's in it for insurers? For one thing, if policyholders live longer, insurers don't have to pay out as soon, according to Chad Hersh, a vice president for insurance at consulting firm Capgemini. Even if wearing a wrist computer doesn't by itself make anyone live longer, there may be a more subtle advantage for insurers. The customers who want to sign up for such a program might be a little more health-conscious—and less risky to cover.

Tal Gilbert, chief executive officer of Vitality USA, the outside company that worked with John Hancock to create its program, agrees that healthy customers tend to be more likely to consider signing up but says there's no penalty for people with health issues. Brooks Tingle, president and CEO of John Hancock Insurance, says the program gives the company a way to connect to its policyholders. Instead of just sending the customer the occasional bill, “we're interacting with customers through Vitality 40 times a month.”

The industry needs new ways to attract customers. The percentage of people owning life insurance has fallen steadily for years, though the decline is leveling off. And with more people buying coverage online, insurers can't rely as much on agents to build long-term client relationships.

Life insurers have long gathered extensive data about customers. Many policies require applicants to undergo a medical exam, giving the insurer a snapshot of their health when they sign up. But the idea of getting fresh, real-time data spurs the question: When does the insurer know too much? There's a growing need for guidelines on how companies use fitness information, says Pam Dixon, executive director of the World Privacy Forum, a nonprofit. While she doesn't think using such information is necessarily negative, she says the fact that the relatively cautious insurance industry is doing so is “a red flare in the sky for all of us that this is here, and it's having a meaningful impact on our lives.”

Vitality's Gilbert says insurers are used to handling sensitive information, “so the bar is very high in terms of how we look after that information internally.” Tingle says the challenge is having a program that customers can stick with: “How do you combat the so-called New Year's resolution effect?”

More ways wearables are influencing health:

Instant Insights /

How Fitbits, Apple Watches benefit life insurers and their customers

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