Due to disruptive technologies, many industries have been refurbished and this trend is now reshaping the insurance world. From challenges arising from the emergence of “insurtech” startups to giant companies such as Amazon, established insurance companies were forced to adjust to the changing industry scene.
Over $8 billion has been invested in insurtech since 2012, so consumers need to be aware of how they are affected by new technologies. Technological advances such as the Internet of Things (IoT), blockchain, and artificial intelligence (AI) enable policyholders and insurers to simplify processes. This means consumers will receive insurance policies in the future that are custom-made to fit their needs, which are faster to subscribe to, and most importantly, cheaper policies.
Personalization, however, can go for the consumer either right or wrong. This is because insurtech will be able to access more detailed and personalized data easily, which raises concerns about data security and privacy.
The true price of your DNA test
It has become increasingly popular and affordable for individuals to undertake DNA testing to investigate either their ancestry or genetic disease testing. However, there may be a dark side to this practice that seems harmless. Note that DNA test kits come at a surprisingly affordable price may be interesting.The real money is made elsewhere, however. For example, for a mind-blowing $ 300 million, pharmaceutical company GlaxoSmithKline purchased access to 23andme’s genetic test results database. This is just one of the many genetic data buying companies.
The concerns about privacy do not end here. Naturally, in the case of life insurance, insurance companies tend to take a keen interest in DNA testing data insights. Insurers require potential policyholders to disclose any medically relevant information in the underwriting process and ask about genetic testing in addition.This could potentially lead to biased treatment resulting in some people being given worse policies because of their test results or even worse being completely denied services. Critics also raise concerns about the fact that the predispositions for diseases shown in DNA testing do not reveal that the policyholder will end up suffering from these diseases, resulting in the risk assessment process putting customers at a disadvantage.
Does your insurer creep on your social media?
It is clear that whatever we choose to post on social media is no longer private. It seems, however, that social media users must include insurers on their list of potential stalkers. Currently, New York State officially authorizes insurance firms to use their clients ‘ social media accounts to determine their premiums. Most insurance companies have very little legal guidance on this issue, leaving insurers to benefit from a gray area.
There are many reasons why insurance companies are able to monitor policyholders ‘ social media accounts. One reason is that if a policyholder posts pictures from a hike that they are supposed to suffer from a broken foot, they may be in trouble. Another reason is the use of social media in the underwriting process for predictive modeling. The presence of technologies such as AI allows insurers to analyze the social media footprint of a policyholder in a matter of seconds effectively. This also speaks to concerns about privacy and potential discrimination when subscribing to policies.
Is insurtech yet another trade-off?
Insurtech can’t be ignored, and in the long run, it seems to be here. It has the potential to make insurance plans more consumer-friendly, more flexible and more cost-effective. This does not mean, however, that there is no price for these new conveniences. The trade-off could be our data security and privacy for insurtech.