Your fitbit could make you uninsurable in the future

The data collected by fitness trackers is becoming incredibly valuable to insurers. Photo/123RF.

Fitbits are already used to track your heart rate, the amount of exercise you do and how much you sleep - essential data that could potentially be used by insurance providers to determine your premiums.

The boom in wearable health tracking technology means we now have more information than ever before on health and well being of people at any given moment.

The Telegraph reports that information collected from these devices is already being used by insurers to calculate insurance premiums and there are concerns that this might lead to only the healthiest customers enjoying lower premiums.

This is serious business. Insurance companies have it in their interests not only to ensure the lowest-risk customers but also to detect potential health conditions before they become severe (and expensive). A study of the insurance market by the Swiss Re Institute, a research organisation, last year found that insurers had filed hundreds of patent applications relating to "predictive insurance modelling".

In making these moves, Insurance companies aim to collect data that could serve to help them make better policy decisions or even tweak existing policies over time.

The Telegraph reported that policy agreements increasingly feature clauses that allow insurers to collect data on their customers.

The impact of tech on the insurance industry isn't limited to health, with car insurers also using telematics technology to track the movements of customers.

The Telegraph cites the example of a vehicle insurer which threatened to cancel the cover of a customer who was perceived to be driving too often at night. The customer worked night shifts and was therefore had to cancel the policy.

Many customers have thus far been willing to hand over their data due to the promise of cheaper insurance premiums.

One such example is US insurer UnitedHealthcare, which gives customers the option to wear fitness trackers and rewards those with good health.

While some have benefited from this, there are growing concerns regarding the broader impact technology will have on the insurance industry. The shared with the insurer is then analysed by Qualcomm Life, a company that processes medical data from wireless sensors for doctors, hospitals and insurance companies. Depending on how active participants are, as measured by the Fitbit, they could earn as much as US$1,500 toward healthcare services each year.

If the customer is healthy and fit, then this is a win-win for both the insurer and the person paying the premium: the insurer reduces the risk of providing the insurance, while the customer pays a lower fee.

But what if the customer has a problem? And as the technology becomes more widely used could insurance companies ask prospective customers for their Fitbit data, in addition to – or even in lieu of – a physical exam or laboratory tests? Could someone be denied insurance based solely on the data collected from wearable tech?

At the moment, this shift is only starting to take place but it could have significant repercussions for the way insurance is sold in the future. If we don't start looking into this today, then the small print of tomorrow's insurance policies could potentially catch us out in ways we couldn't have imagined.

- Additional reporting from The Conversation.