As we speculate about the usefulness of wearables in payments and money management, an insurance startup has already launched a direct tie-in. Buzzy health insurance startup Oscar is paying customers $1 per day, up to $240 annually, when they hit their step goal tracked on a Fitbit-like tracker from Misfit.
Oscar has attracted $150 million in venture capital and is looking to bring modern ecommerce thinking to the massive health insurance market. The company is looking to be on the forefront of insurance tech trends such mobile help from physicians, easy access to records, digital communications, and transparent costs (see app here).
How it works
Customers who buy health insurance through Oscar (available in NJ/NY only, but coming to California and Texas in 2015), are given a free Misfit step tracker (retail value = $50, currently discounted 50%). The tracker syncs to Oscar's mobile app (see inset) and credits customers $1 each day they hit their step goal. Goals start at a relatively easy 2,000 to 3,000 per day and ratchet up to the 8,000 to 10,000 per day recommended by fitness experts.
The bonuses are paid in Amazon gift certificates in increments of $20. The Amazon credit is likely bought at a discount to par value, reducing costs to Oscar (more details here).
Significance for FIs
Oscar can pay out $200 per year because it's selling a big-ticket item, health insurance. And it stands to benefit from healthier customers who use less medical care. Unless you are in the health insurance business, you can't copy this dollar for dollar. The important thing is making a game out of healthy habits by keeping score and delivering tangible rewards (previous post).