How Data Analytics Affects The Insurance Industry
Insurance companies create policies and rates based on the plethora of data that they receive. The whole concept of staying afloat in this industry is being able to weight the expected costs and income over the course of long periods. To better understand how data is used in the insurance industry, we’re going to take a look at a few different ways it gets analyzed.
Identify Lapses In Coverage
One of the most useful ways that customer data is being analyzed is when created platforms are analyzing lapse in coverages. As an agent includes data about each of their clients into these specifically designed platforms, the platform will analyze the client’s portfolio. It will link up renters insurance coverage and other policies they have with the assets they own. This type of system will alert the agent when there is a lapse in coverage for one of the client’s assets, such as a car. This can allow the agent to easily call up their client, inform them of the looming lack of coverage and offer an updated policy agreement to keep it in effect.
Prevent Insurance Fraud
Insurance fraud is a real thing and agents all around the globe have to constantly be on guard to deal with it. To help these agents out, insurance providers are implementing fraud prevention software. This links up things like a client’s social media profile when an insurance claim is filed. This will allow an agent to easily see if the client has shared recent photos of a car or home that was supposedly damaged. By alerting the insurance agent of these potential discrepancies, the insurance industry as a whole can work to cut down on the amount of insurance fraud cases.
Policyholder Behavior Monitoring
Traditionally, insurance companies would use the data on hand from government agencies and their own private studies to identify the possibility of a policyholder filing a claim. This was done on a generalized level and everyone was pretty much offered the same rates on similar types of insurance policies. However, with digital technology being helpful, insurance companies are using it to better monitor policyholder behaviors.
For example, many insurance companies are promoting a box that will be installed on a vehicle to monitor the policyholder’s driving behavior. If the driver is considered to a safe driver based on the monitoring of their car for things like turn signal use and appropriate highway speed, the insurance company puts them into a group they consider safe. This group has less chance of requiring an insurance claim payout so they offer all customers in this group a decreased rate on insurance premiums.
With the growing digital technology available through the internet, many major insurance providers are starting to offer self-servicing customer portals. These allow everyday customers to go to the insurance company’s website and purchase a policy right then and there. Those who have existing policies can get real-time data about their coverage limits and change them whenever they would like. This diminishes the amount of time it traditionally took to set up things like life insurance and car insurance policies.
As you can see, new ways of analyzing data are changing the landscape of insurance providers. Most of these changes are leading to being able to set more accurate premiums for customers and streamlining the signup process. As technology continues to expand in the future, expect to see more useful ways the insurance company will find to analyze data to their benefit.