Access to Digital Data is Revolutionizing Life Insurance Underwriting
Technology and insurance rates are creating a new and sometimes complex dynamic in the insurance world. Coupled with automation, access to data such as electronic medical records, health claims data, and social media information is now enabling insurance carriers to greatly decrease underwriting and cycle times. Some of the more innovative carriers have already started offering completely fluid-less underwriting eliminating the need for an attending physician statement (APS).
The concept of the algorithmic impact assessment will have a role to play here, making insurance offerings and claims settlement more efficient. The market will also have little choice but to adapt to the technology and insurance dynamic and be resilient to what is being called the “goals to guidelines” model in AI-based research. Besides looking at algorithmic bias, the insurance and insurtech industry will need to evaluate data privacy from a whole new perspective. The EU and certain technology-savvy states like California are already enacting laws that will grant consumers and social media users more control over how and why their data is being used in the future. (Source: ThinkAdvisor)
Current News: Insurers Want to Know How Many Steps You Took Today
A smartphone app that measures when you brake and accelerate in your car. The algorithm that analyzes your social media accounts for risky behavior. The program that calculates your life expectancy using your Fitbit.
This isn’t speculative fiction — these are real technologies being deployed by insurance companies right now. Is the technology and insurance dynamic adding fuel to the Big Brother scenario? We can’t speak to that, but last year, the life insurance company John Hancock began to offer its customers the option to wear a fitness tracker — a wearable device that can collect information about how active you are, how many calories you burn, and how much you sleep. The idea is that your Fitbit or Apple Watch can tell whether or not you’re living a good, healthy life — and if you are, your insurance premium will go down.
Consumers buy insurance to protect against possible losses. But this contractual relationship is increasingly asymmetrical. The insurance companies once relied on a mix of self-reported information, public records and credit scores to calculate risk and assess how much to charge. But thanks to advances in technology, the capacity to collect, store and analyze information is greater than ever before. (Source: The New York Times)