Big data and fitness apps - Pump up engagement and boost sales 
As seen in the summer edition of ID Trends ‘22

In the decade and a half since the launch of the first iPhone, technology has changed the world significantly. Smartphones are now the dominant mobile device, giving users the ability to make calls, send texts, listen to music, watch movies, write reports, or shop. Companies from nearly every industry developed apps to improve the customer experience and engagement. Today's devices include features like built-in GPS functionality and accelerometers that can track movement. Then there is the plethora of peripheral devices that can seamlessly connect with phones and apps, like scales and activity trackers. Innovative apps that combine, collect, and leverage this tremendous amount of data can help health insurers and agents mitigate risk, offer cheaper premiums, build engagement, and even generate cross-selling opportunities. 

What does this data tell us? It can provide powerful insights into mortality or morbidity risks for people. A recent study published in the JAMA Network showed that middle-aged adults who took at least 7,000 steps had a 50% to 70% lower chance of mortality. The apps can collect accurate and verifiable data; if a plan participant consistently achieved this activity level, that could translate into a discounted premium from the health insurer. Data has been used in this fashion by property and casualty (P&C) carriers for years. They employ telematics to track speed, acceleration, distance, and braking to reward safer drivers with lower premiums.  

Power of the app

These apps can do more than just collect user movement and activity data. They can be a powerful tool to improve a user's overall wellness by focusing on five key areas: physical activity, nutrition, mental health, social connectedness, and financial wellness. This can be achieved by gentle nudges that get a user to do micro-exercises throughout the day, pause to meditate, or take quizzes to improve healthy eating and financial literacy knowledge.  

The apps can offer some incentives to ensure policyholders use them. They can reward users with points for completing tasks like hitting their step goal for the week or completing quizzes and assessments. When they collect enough points, they can redeem them for gift cards at major retailers or discounts on travel. There can also be a social incentive. The apps allow users to compete against friends, family, or colleagues to see who gets the most points in a week or month. Or, users can communicate through the app to motivate each other to reach their goals. 

Building engagement

One area most agents have difficulty with is building engagement with their clients. They might reach out once or twice a year to send a birthday or holiday card, but it is challenging to do more. However, these apps can collect data that helps them identify changes in behavior that can forecast life-changing events, like marriage or pregnancy. App users will also be increasing their financial literacy through quizzes and will better understand what type of coverage is available or necessary to protect their families. These results can guide agents when to reach out to policyholders and offer new products and services at just the right time - such as recommending new parents review their life insurance policy needs or consider purchasing disability coverage if they don’t already have it. This approach enhances the likelihood of closing new sales or expanding coverages already in place.   

Agents could see other benefits to these apps, specifically, new clients. Many distributors have trouble generating word-of-mouth referrals from even the most satisfied client. But, when clients build a community of friends or colleagues on the app, it offers agents/brokers an opportunity to connect with them and potentially obtain new sales leads.  

In the 15 years since the first iPhone was released, smartphones now dominate the mobile market. In the United States, there are 274 million smartphone users, accounting for about 82% of the market, while 69 million Americans say they regularly wear a smartwatch or fitness tracker. With the proper app, these devices can help users enjoy a lower premium, get healthier, and unlock rewards while also helping distributors and insurers provide additional services when users need them the most. This technology will revolutionize the health and life insurance business for all parties involved - distributors, carriers, and policyholders. And, just like Apple, the first company that can build this engagement while reducing risk, will likely become the dominant player in this space. 

Jane J. Wang is the CEO of Optimity, an insurtech and engagement tool that powers a mobile-1st Engagement Engine with embedded distribution funnels. The Optimity health rewards apps have been adopted by top multi-line insurance carriers, employers, and aligned health partners to adopt a data-driven approach.