Protecting the elderly: insurance and technology working in harmony
Ageing populations are challenging insurers. Christine Dahlke, Senior Actuary for longevity at Hannover Re, explains demographic trends and risks, and Feargal Duignan, CEO of Pacsana, describes how wearable technology can protect the elderly.
According to the World Health Organization, the proportion of the world's population aged 60 and over will nearly double from 12% in 2015 to 22% in 2050. This presents social, economic and healthcare challenges for the long-term protection of elderly people who wish to stay in their own homes.
“Because people are living longer and lifestyles are changing, we must re-evaluate and adjust traditional life and health risk models,” says Christine Dahlke. “New risks and demographic trends require new tools and analytical techniques, and insurers must draw on the latest technologies to better understand life expectancy and support the needs of the elderly. At Hannover Re, we support insurers with longevity expertise, risk management solutions and product design.”
Dahlke says that the longevity challenge, which for insurers means life expectancy may exceed pricing assumptions, is a vital consideration when calculating pensions. However, ageing has implications beyond annuities, and life and health insurers will need better data to cover evolving risks in what will be extended retirements for many. The more insurers can gather data from technology providers, the better that is for setting premiums and investigating claims across life and health.
The growth of ‘connected wellness’
In this context, insurers can harness the insights provided by connected wellness technology, as suggested by the British Actuarial Journal, produced by the Institute and Faculty of Actuaries (A. Spender, C. Bullen, L. Altmann-Richer, J. Cripps, R. Duffy, C. Falkous, M. Farrell, T. Horn, J. Wigzell and W. Yeap). For example, digital monitoring solutions such as wearables and mobile apps could deliver actionable health data and analytics for a variety of underwriting and claims situations.
Prevention is always better than cure, and for older people who want to live healthy and independent lives, digital technology can help to mitigate and manage risks. Because demand is growing for so-called ‘ageing in place’ devices to monitor health and wellbeing, we may see insurers work with technology partners who help elderly consumers and whose innovations have an insurance angle.
Peace of mind with Pacsana
Among the innovators in this field is an Irish company called Pacsana, founded in 2018 by Feargal Duignan. Pacsana’s focus is technology-enabled care, delivered via a wearable that monitors daily activities and provides ongoing data.
“Our bracelet relays key information to care providers,” says Duignan. “They could be homecare companies, family members or other people in the wearer’s support network. Using real-time analytics, the bracelet provides instant notification if there is something unusual and potentially concerning in the wearer’s day-to-day activities. Unlike wearables that monitor medical conditions such as blood pressure, the bracelet gathers only behavioural insights.”
Because older generations frequently struggle with technology, it’s important to create digital devices that they feel comfortable with. What comes naturally to millennials may seem daunting to anyone who is not a digital native, so the technology must be age-friendly. “There are no operational requirements to challenge older people,” says Duignan. “From installation through to day-to-day tracking, it’s a connected care solution that provides meaningful insights without disturbing the wearer.”
In addition to the bracelet, a Pacsana installation comprises:
• Two or more home plug-in gateways, to pick up and relay information from the bracelet. The gateways constantly analyse information from a sensor in the bracelet, building an overall picture of the wearer’s movements.
• A family and care-team app to display the results. Smartphone users who install the Pacsana app will have access to all the behavioural insights logged by the bracelet, giving them an early warning of potential problems. All the information complies with privacy regulations.
The value of behavioural data
Technology providers like Pacsana collect behavioural information, which has potential value for insurers in the future. Pacsana’s wearable increases risk control and could help to set premiums and reduce claims, while wearable technology that monitors vital medical signs has obvious benefits for life and health cover.
”As longevity experts, Hannover Re focuses on life expectancy,” says Dahlke. “However, technology can have a positive impact on protection policies because if people live longer and healthier lives, protection premiums might decrease.”
Although Pacsana has no direct link with an insurer at the moment, Duignan is open to exploring possibilities. The elderly make up one of the fastest-growing markets for specialised cover, and if insurance companies and innovative healthcare providers join forces, it will help to protect and enhance the lives of those who wish to maintain independence into old age.