Manulife subsidiary goes all in on interactive life insurance

The 156-year old insurer’s move marks a major shift toward technology

Manulife subsidiary goes all in on interactive life insurance

Several months after Manulife announced plans to focus on digital innovation in its Canadian business, its subsidiary in the United States has also made a commitment toward technology

According to Reuters, Manulife subsidiary John Hancock has announced plans to stop underwriting traditional life insurance and sell only interactive policies that use wearable devices and smartphones to monitor fitness and health data.

”The move by the 156-year-old insurer … marks a major shift for the company, which unveiled its first interactive life insurance policy in 2015,” Reuters said.

The growth in interactive life insurance in the US, as well as its prevalence in South Africa and Britain, is rooted in pioneering efforts by the Vitality Group, which has partnered with John Hancock as well as Manulife. Policyholders are offered rewards such as premium discounts for hitting exercise targets tracked on wearables, as well as gift cards and other perks earned through logs of workouts and healthy food purchases on an app.

“Privacy and consumer advocates have raised questions about whether insurers may eventually use data to select the most profitable customers, while hiking rates for those who do not participate,” Reuters noted. For its part, the insurance industry has said regulations require it to present reasons, in actuarial terms, for any rate increases or policy changes.

Even though customers’ policies are bundled with the Vitality program, customers are reportedly not required to log their activities to get coverage. John Hancock said it will begin converting existing life insurance policies to Vitality next year.

Brooks Tingle, head of John Hancock’s insurance unit, told Reuters it’s too early for the company to know whether the Vitality program is leading to fewer claims payments. But the data collected so far on customers’ activities suggests it’s working; according to Tingle, Vitality policyholder around the world live 13 to 21 years longer than the rest of the insured population.

The basic Vitality program offered by John Hancock’s lets its life insurance customers get gift cards from major retailers for reaching milestones, as shown by activity logged in an app or website. A more expanded program is packaged with wearable devices and premium discounts of up to 15%, among other benefits.