Digitalisation and personalisation: “Pay as you live” principle or principle of solidarity?

Do increased digitalisation and personalisation signalise the end of the principle of solidarity to be replaced by the “pay as you live” principle in the insurance sector? Dr Stephan Sigrist from the W.I.R.E. think tank has been studying the effects of digitalisation on the economy, sciences and society.  

What’s the idea behind the pay as you live concept?

A person’s individual health and risk profile determines how high or low their premium is and which benefits are included in their cover. Nowadays these profiles can be determined more precisely thanks to today’s modern generation of sensors and digital apps to track user behaviour. In theory, insurance premiums could be personalised using this data.

Is this the future of the insurance industry?

In Europe, these digital apps are still very much in their infancy, as indeed are pay as you live models from insurance companies. The picture is somewhat different, however, for self-tracking, for example the use of fitness trackers. The challenge now is to combine health insurers and digital solutions to create real added value for customers.

What can we expect in the future?

There are currently various attempts to launch such models. Their success depends on whether enough people are willing to part with more personal data and share it with their insurer. A secure infrastructure is absolutely essential but, above all, a great deal of trust in insurers - something which is not really to hand at the moment. Similarly, it remains to be seen how sustainable these personalised premiums would be and whether the entire insurance collective would able to profit from it.


Dr Stephan Sigrist is the founder and head of the Swiss think tank W.I.R.E. The futurologist and trend researcher analyses interdisciplinary developments in the economy, sciences and society. His primary area of interest is the consequences of digitalisation for life sciences, financial services, the media, infrastructure and mobility.