Report: Americans Are Open to Insurance Companies Tracking Their Data
On Aug. 17, Breeze, an Omaha, Neb.-based disability insurance company, released a report by Mike Brown entitled “For cheaper insurance, Americans are surprisingly open to companies tracking Fitbits, grocery receipts, & much more.” Breeze is an insurtech company, which is defined by the company as “a term used to refer to technology designed to enhance the operations of insurance firms and the insurance industry as a whole. Insurance companies are leveraging technologies such as big data, artificial intelligence, consumer wearables, and smartphone apps to transform the way they do business.”
Brown states that “The insurance industry, catalyzed by new-age insurtechs, is experiencing a rapid transformation as personal data, predictive analysis, and technology replace in-person medical exams, face-to-face meetings, and lengthy application timelines.”
Further, “If you have a tiny device attached to your car that tracks speed and hard stops so your auto insurance company can adjust your rates, you're part of the evolution.”
Brown explains that Breeze surveyed 1,000 adult Americans to measure public opinion on whether insurtech is an invasion of privacy or a positive change for insurance companies.
It should come as no surprise that there’s an age divide when the question, “Should insurance companies (life, health, auto, disability, etc.) be allowed to use big data (personal health data, consumer purchases, internet browsing history, social media usage, etc.) to determine your insurance policy pricing?” was asked.
Fifty-six percent of all of those surveyed answered no to this question. Of those 55 years of age and older, 83 percent said no. Of those 35-44 years of age, 54 percent said yes.
Brown stated that “Younger consumers have grown up in the age of the internet, cookies, data harvesting, and the interconnectivity of it all. These things are more normal to them than they are to previous generations, hence the results by age.”
Other key highlights from the report include:
- Fifty-five percent of respondents would be OK with an insurance company having them wear a biometric tracker (i.e., Fitbit) if it meant they may be able to qualify for a lower cost policy
- Fifty-one percent would be OK with an insurance company monitoring their pharmacy prescriptions and other medical adherence behaviors
- Forty-two percent would be OK with an insurance company monitoring their consumer activity and purchases (grocery receipts, gym activity, Amazon purchases, etc.)
- Eighty-five percent would trust an established, incumbent insurance carrier over a newer insurtech startup when in the market for a policy, including 91 percent over the age of 55 and 82 percent between the ages of 18-24
- Even if they had to pay a higher premium, 53 percent would go with an insurer that has a completely online process and uses data to price policies if it meant they could bypass an in-person medical exam
Sarah George, an insurance writer at Finder, was quoted in the report saying that “If AI technology is set up well, it can be a win-win for customers and insurance companies. Customers can get accurate quotes without a long application, and insurers don’t have as much manual underwriting work to do. The one downside is that many are concerned about privacy when giving out their sensitive information. I’d love to see insurance companies cater to data privacy concerns as they come out with new technology or AI-powered products.”
