A health-and-care actuary’s perspective Wearable technology A health-and-care actuary’s perspective Matan Abraham 22 June 2016

Wearables measuring clinical health metrics Healthcare wearables Wearables measuring clinical health metrics Currently the most popularly consumed with 34.25 million units sold worldwide in 2015. Source: Statista 2016

And this is only the beginning… Lung cancer sensor Smart Bra SmartStop Devices in concept Kinsa Smart Thermometer Simi Skin-like Device ReSound LiNX

So what do we know about you? Past Present Future Age Gender Occupation Place of work Education Chronic illnesses Family health history HIV status Smoking status Glucose levels Platelet levels Steps count Distance walked Active minutes Tracked workouts Kcal burned Average HR Sleep patterns Nutrition habits Lung function Hormone levels Medicine intake Toxin levels Nutrient intake Body temperature Chronic disease management adherence Dread disease indicators At a single point in time Continuously!

Improved risk stratification & underwriting Better, more granular understanding of risks and exposures from policyholders accepted at standard rates NUMBER OF INDIVIDUALS Can also improve upon current resource intensive and costly underwriting practices. Standard rates Rated Exclusions Deferred Declined EXPECTED MORTALITY/MORBIDITY

Allows for the incorporation of premium discounts into product design. Improved premium rating Allows for the incorporation of premium discounts into product design. NUMBER OF INDIVIDUALS Standard rates Rated Exclusions Deferred Declined Super preferred rates Preferred rates EXPECTED MORTALITY/MORBIDITY

Increased insurability Allows for a data-driven and active approach to managing morbidity and mortality risk. NUMBER OF INDIVIDUALS This facilitates insurers’ ability to provide cover to those that were previously declined or deferred. Standard rates Rated Exclusions Deferred Declined EXPECTED MORTALITY/MORBIDITY

Further product design innovation Lifestyle programmes Income protection/ disability insurance Managed care

Risks and challenges Developing rating factors Analytical work required to turn wearable data into rating factors used to determine estimates individual morbidity and mortality rates. Statistical modelling vs experience rating approach Product design challenges Self-measured and inputted data Policyholder opt-in to provide data and actively use wearables Accuracy of wearable devices Measurement manipulation Data privacy and data management Operational challenges

Thank you! matana@insight.co.za