Difficulties in promoting to group market

But it is not that simple, as Paul Avis, marketing director for Canada Life Group Insurance, explains. “While telematics has worked for car insurance, no employer can force an employee to change their personal lifestyle.

“So no employer can force a worker to wear a piece of kit. While they can be a facilitator of health or lifestyle change through the benefits programme, coercing and gathering data of this kind will not work well in the group market.”

He also highlighted the Data Protection Act, which states employers must have the employee’s explicit consent to hold any personal medical records. “An employee could withhold consent and so if the group market were to adopt PAYL then it would have to use collated, anonymised data for a group scheme.”

He says it could work if, for example, data went straight to the insurer and bypassed the employer, but firstly, not many insurers have the ability to gain the collated data from any particular workforce, and secondly, the level of engagement among employees would be too small to make an impact on the premia.

“Whether this would even filter through to a reduction in the premium over two or three years is debatable, and it may not have any discernible effect on the cost of cover”, he says, adding: “As far as I know, nobody has gleaned FitBit data from every employee in an organisation and provided a long-term, evidence-based study showing that wearable tech has a sustained, beneficial impact on premiums.”

Benefits become a better way of creating behavioural change Tom Davis

However, Keith Aylwin, director in EY’s insurance practice, says while no employer can force all employees to participate, “it can apply to corporate wellness offerings. For example, a corporate wellness proposition offers corporate clients a health assessment and stress assessment.

“But if insurers can use PAYL data, looking at stress monitors, heart-rate trackers, then they can make more interventions.

“I don’t disagree with what Mr Avis says, but from our perspective, the end user - the employee - opts in and, by opting in, they agree to share their data.”

He pointed out this sharing was controlled by a third-party telematics provider, so that the employer does not have access to the client information.

“The data shared is not that sensitive - i.e, calories burned or steps taken, and even then only authorised people from the insurance provider are allowed access to that data.”

While a mass underwritten policy may not mean a premium discount applies to the employee, Mr Aylwin says: “If you can identify those who have signed up, they could get free or subsidised gym membership, or build up points and rewards.

“The provider will create this process so the employer can be one step removed.”

Tom Davis, head of research and development for Vitality, says this is how Vitality’s insurance model, focused on prevention and health promotion, works.

“A large corporate PMI scheme will have a range of staff who are not paying their own individual premiums. Employers cannot mandate the use of wearable tech at work, so this is where rewards come in. You provide a reason for employees to choose to use FitBits, such as cashback or tickets.

“These benefits become a better way of creating behavioural change, and corporates with schemes that provide such engagement tend to see more improvements in staff health and absence rates.”