Insurance Companies are Using Big Data Analytics, know how
The Internet has become the most potent source of information in recent years. It has brought all the information at a person’s fingertips. Businesses are also leveraging this innovative solution to offer various innovative services to their customers.
Many insurance companies are leveraging technology tools to keep track of the media their potential customers are consuming, and many other things like the lawsuits, credit record, education, employment, and so on to help determine the risks involved in underwriting policies. For example, insurance companies tap various social media channels and other digital mediums to make coverage decisions on home, auto, life, and health insurance. Insurance companies also use price optimization to access how much premiums they can raise before the customers start shopping around.
Facial features are just one of the many aspects that the insurance companies are using to decide the insurance policy. Insurers and the other third-party vendors are using big data analytics to study the digital footprints of their customers. Many insurance companies have used the powerful algorithms of Facebook to collect personal information of its users. Facebook provided them with deeply personal health information about a user which includes substance disorder abuse, HIV status, transgender parenting, and past history of sexual assault.
Insurance companies put an immense amount of efforts to collect as much information as they can about a potential customer before offering auto, health, home or life insurance. The companies use many aspects like the customer’s lifestyle choices, magazines they read, the place they reside, pending or resolved criminal or civil lawsuits, education level, and employment. For auto insurance companies driving records and mileage are the primary criteria.
Insurance companies collect most of the information and algorithms from the third-party vendors, which makes it very difficult for state regulators and consumer advocates to point out specific industry indiscretions.