Let's make a deal: Personal data for lower premiums
While consumers are willing to reveal personal data for lower rates, their social media details are off the table.
In exchange for lower insurance premiums, 72% of consumers would share some form of personal data, including health and home information, according to a survey by Capco. Younger consumers (18-24) are even more willing to share, as 87% say they would divulge their details for lower premiums.
In addition to health tests, which one-third of respondents would share, 29% would reveal details from their smartwatch, while 32% would share data from a smart home device.
The application for smart devices, particularly for the home, are many, and more are coming online all the time. A great example used today is the ability of a smart device to assess claim damage in real-time, providing near-immediate claim response services to the policyholder from the carrier, according to Ernst Renner, partner and head of U.S. insurance for Capco.
“Of course, every carrier has a different capability to do this or support smart home device products, but many are going there as the smart home continues to gain popularity,” he says. “It (smart devices) is definitely a growing area of interest in the industry, across all insurance types.”
Unfriended
While a majority of consumers are willing to share data to lower their insurance costs, they are only willing to go so far. Only 20% would feel comfortable sharing their social media data, Capco reports.
Consumers are protective over social media data because they feel companies commercialize it, Renner explains.
“Different than other industries, insurers are also using that data to provide the consumer with a better experience in the way of offers that are associated to the consumer’s lifestyle and risk profile,” he tells PropertyCasualty360.com. “Usage-based statistics offer even more areas of customization of insurance products for consumers, providing the ability to underwrite risk based on recent activity or risk.”
Of course, insurers using data can also bring a lot of savings to consumers, Renner adds.
More insurance education needed
The survey also revealed that more than one-third of consumers don’t feel well informed about insurance. This is leading some to go without coverage. More than a quarter (28%) of uninsured respondents say they are without coverage because of a lack of industry knowledge. A quarter of uninsured respondents report that insurance is “unnecessary.”
Further, people with higher levels of education report being more self-assured about their insurance knowledge. Those with higher educations also will more readily share data for lower rates.
“We believe the willingness (to share data) tends to slightly increase with an increase in education, as it relates to insurance products,” Renner explains. “This is supported by our readout associating education levels to those that choose to buy an insurance product. This is an important finding because, in general, the insurance industry and their distribution partners are actively working to help reach out, engage and educate all people because there is a cohort that can benefit from coverage. That reach out would, or should, include ‘how we use data.’”
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