Insurers hoping to gain new insights on marketing to city residents, minorities and low income populations are designing a study they hope will provide a competitive edge in reaching potential customers.
The Urban Insurance Partners Institute is sponsoring the research, which will include nontraditional data with what is more typically used in marketing studies. The group has invited personal lines insurances companies to participate.
“We are told that many urban and emerging markets consumers use financial services differently than other traditional market consumers,” said Gregg Dykstra, chief administrative officer for the National Association of Mutual Insurance Companies. “Therefore, the study will test and analyze other information in an effort to help interested insurers better understand emerging market consumers and their risk profiles.”
The UIPI will obtain credit data for the study from Convergence Data, including such information as check writing and banking history, payday loans, installment credit and debit card transactions.
“Our data can help segment risks in the population without credit-based insurance scoring, which is a major objective of the study,” said Convergence Chief Operating Officer Bill Wilson.
He said his firm's experience has shown “that we have positive underwriting data on about two-thirds of this population, enabling insurers to confidently offer better rates based on better risk information.”
The basic process for insurers participating in the study was established at a recent meeting. Each company will submit a set of its policyholder records, with other data added after having any policyholder identifiable information removed. After the study, each insurer will receive their results, the overall study results and dollar loss projections for each policy in their file.
The results of the study will be unveiled at UIPI's Urban Insurance Advantage Workshop, which is being held in November in Chicago.
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