The Way Customer Information Is Being Used In The Insurance Sector

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We all know that data is life. Having significant data can be able to provide you ample information about someone, especially about your policyholder when it comes to the insurance sector. Today, data can be pulled from almost every aspect of our lives. Technology like blockchain and AI is implemented into everything we do, from our workouts to the food we buy to how fast we drive our cars. Insurance underwriters have mass amounts of data at their fingertips, which plays a huge role in the underwriting process, and most insurance programs will try to accelerate the process by pulling from key databases. Underwriters are looking at public data to determine policies.

Recently, we’re seeing companies begin to use implicit data available to determine customer risk and mortality. With devices such as smartwatches, companies and underwriters have access to a wealth of fitness and health data they can analyze in the underwriting process. In the future, there’s a scene where someone may have a higher premium based on poor health records or weight but is still able to lower their premiums by improving their wellness with activities tracked by data from their fitness wearable. But opting in to share fitness data can of course cause adverse selection if companies aren’t careful. While sharing fitness tracker data could benefit some people applying for insurance policies, there some also that pose the risk of creating inaccurate data pools; an opt-in program could negatively impact customers who choose not to participate. Additionally, the data from those who do opt-in may not provide an honest representation of health status, that is why as insurers, we need to be observant and be able to determine and segment those that are relevant and those that are not.

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