Policyholders are increasingly open to sharing their personal data with insurers in exchange for personalized products and cheaper premiums, according to a recent survey by Capco, a tech consultancy firm. The study found that nearly nine out of ten policyholders are willing to share more personal data to secure these benefits.
When it comes to sharing data, consumers prefer using smart devices in their homes. Around 45% of respondents stated that they are comfortable sharing information via devices like Amazon Alexa and Google Home. Additionally, 36% indicated their willingness to share data through wearables or fitness health tests. The survey surveyed 1,000 policyholders in the United States.
Trust emerged as a significant factor in policyholders’ decisions regarding which carriers to share their data with. Meredith Barnes-Cook, a partner with ReSource Pro Consulting, noted that carriers are offering loss prevention initiatives as a means to prevent undesirable incidents from occurring. This approach creates a partnership dynamic where both the carrier and the customer benefit. Barnes-Cook further suggested that carriers could offer immediate rewards to policyholders for sharing data, such as gas discounts and gift cards. Additionally, she recommended that carriers leverage data to provide feedback on driving habits before renewals, thereby helping to keep premiums more affordable.
Ernst Renner, partner and U.S. insurance lead at Capco, emphasized the importance of building new relationships with consumers through hyper-personalized offerings, delivered at the right time and in the right way. The rapidly evolving insurtech landscape reflects this trend, with more companies focusing on underwriting technology to enable the development of personalized products. The survey indicated that 67% of insurtech respondents are targeting underwriting, compared to 28% last year.
Improving and ensuring reliable data could have numerous benefits for underwriting technology. It could streamline the policyholder buying experience, expedite processes like straight-through-processing, and enable carriers to tailor pricing based on the data provided. This, in turn, could enhance renewal decisions by providing carriers with more accurate insights into the relative risks posed by their customers.
Customer experience continues to be a top priority for carriers and brokers embarking on digital transformation efforts. According to Digital Insurance’s State of Insurance Digital Transformation 2023 report, 48% of respondents ranked customer experience as their primary focus, while 85% placed it within the top three priorities. However, the report also noted a decrease in telematics, Internet of Things (IoT), and telemetry pilots over the next 18 months, suggesting that insurers are analyzing the data obtained from previous IoT initiatives or establishing a robust data foundation before launching new ones.
The survey revealed that women and older adults above the age of 55 are the least comfortable with sharing their personal data. Nonetheless, only 5% of respondents indicated a lack of trust in their insurers when it comes to protecting their data.
Lance Levy, CEO of Capco, highlighted the progress made by U.S. insurers in terms of digital maturation during the pandemic and their improved capabilities for driving digital enablement. He emphasized that the learnings and innovations from this period would prove invaluable for insurers as they explore new ways to develop truly personalized product offerings for consumers.
