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Strategystretch
Should a fitness tracker company start selling health insurance?
How to approach it
Ask whether the company's data gives it an edge in pricing risk, and weigh that against regulation, capital needs and user trust.
How a strong answer opens
“I'd ask whether the company's data gives it a real edge in pricing risk, and weigh that against regulation, the capital insurers must hold, and user trust.”
Outline of a strong answer
Try answering out loud for a few minutes before you open this.
- Clarify the goal: new revenue, more value for subscribers, or a reason to wear the device more
- Test the claimed edge: does activity data predict claims better than what insurers already use?
- Name the barriers: state insurance licensing, capital reserves and claims handling
- Weigh user trust: people may stop wearing a device that could raise their premium
- Compare paths: become an insurer, refer customers to insurers, or partner with insurers that reward activity
- Recommend a partnership with opt-in data sharing, judged by enrollment and device retention
Where this question usually goes wrong
Assuming health data makes insurance easy, while ignoring regulation, capital needs and how users would feel about their data setting their premiums.
Learn the method
Should we enter this market? in Module 5, Product strategy.
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