It is not often that I get to reference an article from ESPN for a blog post, but as March Madness is complete and we’re coming close to the NBA playoffs, this topic resonated with me.
The article, entitled Why the NBA slapped the wrist of Matthew Dellavedova, focuses on the use of wearable technology by NBA players. Not exactly an insurance topic, but it brings up many topics that do apply to our industry. It is also a fun read.
In a nutshell, a company has created a super-wearable for use by athletes called the Whoop (pronounced without the W). It is unique in that it not only captures current information, but more importantly trends in information. It focuses on my more than just activity during the game, but includes other areas such as sleep monitoring, including the impact of late evening caffeine.
The reason Matthew Dellavedova was slapped on the proverbial wrist was wearing a Whoop on that wrist during a game.
Now there are some obvious reasons why that might be a bad idea, particularly if that wrist came in contact with another player in the eye, or other sensitive area.
But the interest from the insurance perspective is narrower (although that could be a pretty big claim).
The challenge is the use of wearables isn’t covered in the current contract, which was negotiated well before wearables became a thing. So the issues include:
- Marketing rights – what happens if the wearable in use is different than the ‘official wearable of this sports league?
- Ownership of data – This is the big one for our industry. Does the player own their data? If so, that data may have value and they may need to be reimbursed for the data.
- Use of the data – this is another big issue. If the data could potentially predict an injury, or the likelihood of an injury, this could affect the value of the player, lowering their total contract.
- Security of the data – This one isn’t mentioned in the article, but what if a competitive team hacked your data. Worse a dishonesty bookie or bettor hacked your data. It would be interesting to know that LeBron was having breathing difficulties the afternoon before a game, wouldn’t it?
These are just some examples, but we can see how they could come across to insurance. If an insurance company wants my health data or my driving data, there better be a significant quid pro quo. Some auto insureres address this with a signing bonus when you enroll in their telematics program, essentially buying your data. Other programs offer you discounts for this information, if you do what you’re supposed to do (drive safely, exercise more). This gets more complicated as wearables evolve. The use of this data in underwriting could dramatically affect your premiums, but if you own the data and refuse to provide it, what happens? What are the legal ramifications of a declined life insurance policy because of wearable data?
For the average consumer, the security of the data really isn’t an issue and I’ve said this before. If a hacker really wants to know that I didn’t walk my expected 10,000 steps today (after all, I work from home, there are only so many steps I can take), than they are welcome to that data. I feel the same about a lot of health data. My cholesterol level isn’t something that could be used to steal my identity.
Just as driverless cars have ethical and legal issues to resolve, so do the expanded use of the Internet of Things in our industry.