New Zealand’s biggest life insurer will offer discounts and up to $4000 a year in rewards for people who eat healthily, exercise and sleep well.
But policy holders would have to prove they are being healthy by recording the information on devices like Fitbits or a Garmin, which customers purchase themselves before handing them over to their insurer.
And privacy experts have warned Kiwis to do their homework before signing up, saying the data could go to advertisers, which allowed them to target the person.
People who have life insurance with AIA New Zealand will be able to join its Vitality programme from June.
Points are accumulated daily depending on how many steps a policy-holder is recorded taking, going to gym and taking part in organised sporting events (including a marathon).
Things like heart rate, speed travelled, calories burned and steps taken are tracked.
The points will give them access to rewards including discounted flights and accommodation, movie tickets, gym membership and supermarket vouchers.
“So you are getting that constant value. But ultimately it is about cheaper insurance,” said
Damien Mu, AIA’s chief executive for Australia and New Zealand.
He said points add up to meet three levels of rewards ranging from bronze to silver and platinum.
The programme was deeply grounded in behavioural economics and aimed to tackle the four main lifestyle risk factors: physical inactivity, unhealthy diet, smoking and excess alcohol consumption.
Those lifestyle choices could lead to four non-communicable diseases: respiratory disease, diabetes, cancer and cardiovascular disease. Together, they were responsible for 90 per cent of deaths in Australia and New Zealand.
Users of the programme will download an app and fill out a health survey which will give them a “lifestyle age” and an instant discount off their insurance.
Mu, who considers himself to be healthy and trains every day, said he was “shocked” when he found out his lifestyle age.
He said some of his biggest issues were not getting enough sleep or eating regular meals.
The programme was aimed at encouraging people to make small changes in their daily routine.
“It’s not about becoming an elite athlete,” he said, “but making small changes that lead to a healthier life.”
The Vitality programme was launched 20 years ago in South Africa, and AIA has expanded it globally, introducing the product in Australia three years ago.
Mu said take-up in Australia had been around 80 per cent for customers with advisers and he expected a similar level of interest here, although it was likely to take some time to build up to that.
“For the first six months we expect take-up to be around 25 to 30 per cent, growing to around 70 per cent within two years.”
He said none of the information provided by customers would be used for underwriting the person’s life insurance or shared with other insurers.
“There are strict guidelines for how we use that data.”
But Thomas Beagle, chairman of the Council for Civil Liberties, urged people to be cautious before signing up.
While there were no privacy issues with people deciding to give away their own data, they could also accidentally give away data about other people in their family, which could present issues in the future.
“The other issue is where is the data going to go?.”
He said typically the data could go to advertisers or partners in some way, which allowed them to target the person.
Often companies got around the issue by saying they didn’t share the data with advertisers, but sent out information on their behalf.
Beagle said even if data was anonymised it could still identify a person, with recent research showing it is easier to de-anonymise information than expected, by linking it to other data sets.
He was also worried about other insurers getting access to the data, which could be detrimental to future cover, if they got a client’s permission to access all previous insurance records.
“Think of the long term implications of the data. That data is going to be around for 20 or 30 years. And we are finding out new ways of using data all the time.
“What may seem innocuous now may not be in the future.”
Rick Shera, a partner at law firm Lowndes Jordan who specialises in privacy law, said information like this was very personal and sensitive.
Sharing the information could reveal all sorts of things, particularly if it showed changes or trends over time.
“Also, it can be combined with other information gleaned from public sources like social media or other purchased data, that then reveals a detailed profile of the person – far more detailed than they may realise.
“This raises issues of whether the true purpose of the information is disclosed, who the information will be shared with, how long it will be kept and, as we see over and over again, the danger of the information being hacked or inadvertently being disclosed.”
Shera said the company was potentially “disadvantaging” other clients who did not feel comfortable sharing such information.
“That seems unfair.”
A spokesman for the Privacy Commissioner said companies offering services that collected a lot of sensitive personal information needed to make sure their privacy policies and the terms and conditions were clearly explained and easily understandable.
“People signing up to them need to be made aware of what information is being collected and how it will be used so they can make an informed choice as to whether or not to sign up for that particular product or service.”
But Mu believes the product will be a game-changer for the New Zealand life insurance market, which has stagnated since 2012 and come under fire from regulators in the past couple of years over high commissions to advisers and incentives to sell rather than do what is best for the consumer.
Advisers won’t receive any added bonuses for getting people onto the programme, but Mu said they would benefit from greater client satisfaction and clients sticking with the policy for longer.