Smartwatches and insurance a privacy risk

How should we feel about health insurers subsidising smartwatches for their members?

Well, it’s complicated. Yes, smartwatches genuinely have the ability to save lives, such as in the extreme cases where the wearer has been involved in an accident, and the fall detection feature on their Apple watch has automatically called an ambulance (complete with location data).

There have been less dramatic, but equally important, scenarios where a smartwatch or fitness tracker’s heart-rate monitor has detected a spike in the cardio rhythm, prompting a lifesaving hospital visit.

However, that’s not really what this is all about. Health insurers have started subsidising Apple Watches as a way to encourage their members to be more active. This is obviously a good thing.

Vitality Health in Britain , for example, offers its members a chunk off the Apple Watch price (usually about a quarter). It then provides them with a 0 per cent interest loan for the remainder of the cost, which they pay back at roughly $2 a month over three years.

Users can then bring down how much they pay back by completing activity goals set by Vitality Health – monitored and verified by their Apple Watch. Those who complete all their goals in a month won’t have to pay a penny. This continues for the lifespan of the loan.

It’s a very neat package. Customers get a shiny new Apple Watch, potentially for free. And insurers know that its engaged users are, in some markets, 25 per cent less likely to make a claim.

Win-win, right? On the surface, yes. But it’s more nuanced than that.

Insurance companies aren’t forking out for the latest highend smartwatch to simply give their customers a nice perk. They’re doing it to increase profits.

Having to cover fewer claims is the obvious saving. But user data is the real gold mine here.

The latest Apple Watch is undeniably a fantastic personal health tool. It can monitor your heart rate, sleep quality, noise levels and provide insight into menstrual cycles.

Best of all, it has the ability to take detailed electrocardiograms, although the New Zealand authorities haven’t given that feature the green light here yet.

Couple these high-end features with something simple such as location tracking, and you’ve got a device that’s capable of breaking nearly every privacy-focused human right going.

Which is why Apple keeps such data securely protected – and to give Apple credit, its record on data and privacy is fantastic.

But third parties, such as health insurers, put this data at risk.

Just this week, United States technology sites have been covering the news that a startup health insurance company for over-65s, Devoted Health, had started offering Apple Watches to its customers. And like all health insurance companies doing this, it will incentivise healthy behaviour, monitored via the Apple Watch, with benefits.

What’s Devoted Health’s record like on data protection? No idea. I’m not sure many of its 4000 Florida-based members know either.

So what happens when a health insurance company with mountains of user data is hacked? I’d argue the habits of thousands of wealthy old Americans could be very valuable information to the wrong sort of person.

Hospitals are hacked all the time. In 2019, a hospital server would host patients’ individual smartwatch records including sensitive information such as electrocardiogram readings.

It’s not unthinkable that rogue employers would use such data in their hiring and firing decisions.