With Discounts For Healthy Behavior, John Hancock Courts Privacy Concerns

Transcript

MELISSA BLOCK, HOST:

We've heard a lot in recent years about companies offering incentives to employees who use the gym. Well, today the life insurance company John Hancock said it'll offer discounts to people who track their exercise and get in better shape. The company will even give out wearable exercise trackers to help with the monitoring. But as NPR's Chris Arnold reports, to get this benefit, customers will be giving away some personal information.

CHRIS ARNOLD, BYLINE: John Hancock is saying basically, look, nobody wants to die young. We all want to live healthy and happy lives, so giving people incentives to stay in shape will help everybody. The life insurance company pays out less money, and the people who buy the life insurance can live longer and save up to 15 percent on their monthly payments. The company announced the move on a webcast complete with inspirational videos.

(SOUNDBITE OF VIDEO)

UNIDENTIFIED MAN #1: We all need to be healthier and be more mindful of our health.

UNIDENTIFIED MAN #2: I want to be that guy that's older that can play basketball with his kids and just have fun with them.

ARNOLD: That sounds pretty good. To ask some questions about all this, we got John Hancock CEO Craig Bromley into a studio. Bromley says this is a big shift for the life insurance business.

CRAIG BROMLEY: It's an entirely new concept in life insurance that we think is going to transform the industry.

ARNOLD: Bromley says for 150 years, John Hancock has been selling life insurance, but what's difference here is that the company will now be actively trying to change people's behavior. There's the free Fitbit that tracks your exercise and sleep patterns, a phone app that can tell if you're actually at the gym, and you get regular nudges and incentives to go to the doctor or get a flu shot. If you do all that, you could get say a half-price hotel room or some other perks.

BROMLEY: That nudge that you're talking about, you know, that's quite different, if you think about it from a life insurance company, than what we usually do, which is you basically buy the policy and it stays quite passive. We don't really communicate that much with you, but that's really going to change where we'll be communicating constantly to remind you to do what's right for you.

ARNOLD: All this is very big. In fact, it's bigger than life insurance. There are similar incentive programs for auto and health insurance, that's in the U.S. And in China, Australia, parts of Europe, South Africa, companies are using devices to track customers' activities and often to try to influence them. Scott Peppet is a professor at the University of Colorado Law School.

SCOTT PEPPET: It sort of turns life into a game, right? You're getting points if you go to the gym today. I mean, you want to be a better driver. You want to be healthier. You want to exercise.And maybe this little nudge is all you need. So at a certain level, this is probably a positive thing for a lot of people.

ARNOLD: Peppet studies all this tracking technology. But, he says, at what point does this become kind of creepy or too intrusive? For now, the fitness trackers mostly just log how many steps you take a day or your sleep pattern, but the next version of might track your heart rates or eventually know if you smoked a cigarette or ate a whole pizza. Your phone can't do that yet, but it can track you in lots of other ways.

PEPPET: Lots and lots of different kinds of data are suddenly being gobbled up and can be collected about us.

ARNOLD: And privacy advocates worry that there just aren't enough controls on companies that collect this data. John Hancock says in its case it won't sell the information that's collected. And for insurance companies, more data is good. They get better at pricing risk for individual people. If I'm super healthy, well, I should pay less.

PEPPET: And that's definitely the argument for these things, right. There is this inherent feeling of, look, this is fair to price more and more accurately, and at a certain level that's right. At another level, it raises some hard questions about how society is built.

ARNOLD: So say for a single dad juggling two low-wage jobs, its way harder to find time to exercise or even join a gym. Should a guy like that have to pay more? Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.