Global insurance giant Manulife is looking to wearable fitness trackers, data collection and an enticing rewards program to boost sluggish sales and connect with customers in a radical new way.

Or that’s the pitch anyway.

What’s really going on is Big Insurance is looking to extend their information advantage over you, the Small Customer. Insurance companies make their money by taking bets they, on average, win. In order to maintain that average, or increase it, they collect oodles of data on the policies they write to figure out the odds of having to pay.

If the odds are in their favor, they give you a policy. If the odds favor you, they don’t.

Plus they’re always looking for a way not to pay. Pre-existing medical condition? They’ll take your money until it comes time to use the policy, then they’ll weasel out of the bet.

By giving insurance companies more data, you allow them to fine tune their betting and welshing strategies. It may look like you’re getting a good deal or fair coverage but thanks to supercomputers and loads of data they’ll win – every time. You’ll lose.

The insurance companies are looking to massively extend that advantage by offering rate reductions and incentives to customers who will share this data. For instance, customers who demonstrate they’re focused on health – from annual checkups and flu shots to frequent gym visits. Or installing GPS trackers in your car to make sure you drive the speed limit and don’t under-report how much driving you do in a year.

Manulife’s U.S. program, run by subsidiary John Hancock Financial Services, gives customers points not only for working out, but also for maintaining good levels of blood glucose, cholesterol and blood pressure, and for not using tobacco.

Other health efforts such as mammograms, colonoscopies and dental screenings also add up.

The customer is ranked bronze, silver, gold or platinum and can earn a 5 to 15 percent discount on his or her premium the following year.

This new effort to lure consumers comes at a time when insurance companies are not only digging for new policyholders in a mature market, but also building larger wealth- and asset-management divisions that compete with financial institutions such as banks. Lenders benefit from their more frequent contact with customers.

Sounds good right?

Wrong. What happens if you have unique circumstances not captured in the ‘average’?

For instance, you break a leg at work which prevents you from doing any physical activity for half a year. Or what if you have naturally high cholesterol, as some members of the population have.

What will happen is that you’ll pay more. Or, more worryingly, you’ll be denied coverage or have the policy cancelled.

This scenario already happens with cancer survivors. If you have had cancer once, odds are no insurance company will cover you in the future, for anything health related, regardless of if you have a clean bill of health.

Imagine this concept extended back throughout an entire person’s life, like our children’s. Diabetes? Too many lung infections? History of concussions from sports? Above average number of cavities? All could be grounds for insurance companies to price gouge, deny coverage or welsh on payments.

By giving them more data you’re giving them more opportunity to take advantage of you.

Insurance companies looking to ‘boost revenues’ and ‘increase margins’ are not your friends. That money comes from you, the policy holder, and is enabled by Big Insurance’s data crunching juggernaut.

The more data you give them the less coverage you get, plain and simple.

So next time an insurance company offers you a free Fitbit or a rewards scheme to put a GPS in your car, just say thanks but no thanks. You’re guaranteed to get none of the upside and all of the downside.

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