Artificially-intelligent software is increasingly crunching consumers’ social media data — and getting health information from apps on their cell phones and Fitbit-like devices — to help companies price and sell life insurance.
“Some of the life insurers have already started offering policies that reward policyholders who record and share their physical activity using wearable devices and more insurers might offer similar products in the next couple of years,” states a report prepared by the tech consulting firm Capgemini.
In the United States, insurer John Hancock’s Vitality Program already encourages policy holders to share their personal fitness information by giving them a break on their premiums and rewarding them with Apple watches for only US$25 plus tax — provided they exercise — and complimentary Fitbits. These track the policy holders’ exercise regimes and help them stay on track with their healthier lifestyles, while giving the company up-to-date information that helps it gauge its risks.
“By applying data analytics on the real-time data received from wearables and other sensor devices, life insurance firms can generate more granular insights to design and customize products based on the risk exposure to each customer,” reads the Capgemini report.
That’s leading to things like cheaper, short-term life insurance targeted to tech-savvy Millennials.
“Your experience with life insurance will become more convenient and the products will become more personalized,” predicts Nate Root, vice president of data and analytics for the insurance industry at Capgemini.
“You’re going to be able to buy short-term life insurance when you go on trips,” he said.
Canadians headed to exotic locales often buy health insurance which covers medical needs and typically has a smaller death benefit than regular life insurance policies. But the insurance industry’s growing love affair with financial tech means consumers will soon be able to get life insurance policies for periods as short as a vacation abroad.
In its Top 10 Trends in Life Insurance 2018, France-based Capgemini outlines how the use of powerful, online technology is likely to be a game-changer for the life insurance industry.
Driven by intense competitive pressures that are squeezing margins and a shift in customer preferences towards greater convenience, increased use of technology and more personalized life insurance policies, companies are jumping onto what is being dubbed the InsurTech bandwagon, the use of technology in the insurance industry.
Google and Facebook-type algorithms, e-commerce websites, wearable computer gizmos, and the software spine for cryptocurrencies like the Bitcoin are all being enlisted by life insurance companies to grow their market and boost their profitability.
“The InsurTech phenomenon has moved from being a buzzword to becoming a potent insurance business disrupter,” reads the Capgemini report.