Most consumers are willing to share more data with insurers: Capco

Almost nine out of 10 policyholders are willing to share more personal data with insurers to secure personalized products and cheaper premiums, according to a survey from Capco, a tech consultancy firm. 

Consumers preferred to share data using smart devices in the home: 45% said they are happy to share information via Amazon Alexa, Google Home and the like. A little over a third of consumers (36%) said they were willing to share data through wearables or fitness health tests. The survey polled 1,000 policyholders in the U.S.

Meredith Barnes-Cook, a partner with ReSource Pro Consulting, said that the Capco study shows that trust is a big driver in selecting a carrier to share data with. 

“I think there is a compelling loss prevention component that carriers are offering ways to prevent bad things from happening, and so it’s a partnership,” she said. “If you sign up, the carrier wins because they have that ability to prevent losses from happening and the customer has peace of mind. … You feel good about an insurance company that offers to create a partnership with you.”

Barnes-Cook said she has spoken to several carriers that are considering offering policyholders more immediate rewards for sharing data like gas discounts and gift cards. She also suggested that carriers have an opportunity to offer incentives like corrective feedback on driving before a renewal period to keep premiums more affordable. 

Ernst Renner, partner & U.S. insurance lead at Capco, said in a statement: “The year ahead will be pivotal for building new relationships with consumers through hyper-personalized offerings, delivered at just the right time in just the right way.”

Digital Insurance’s State of Insurance Digital Transformation 2023 report indicates that insurtech companies are flocking to underwriting technology, as carrier partners look to upgrade. Modernizing underwriting technology will likely lead to more personalized products for policyholders. About 67% of insurtech respondents say they are targeting underwriting with their product or service compared to only 28% last year. 

Better and more reliable data could benefit underwriting technology in several ways, said Barnes-Cook. For example, it could be used to streamline and expedite the policyholder buying experience and to facilitate more straight-through-processing. 

“When results get turned around faster and you have that confidence and the pricing is tailored, maybe even based on that data, the carrier can move from what do you want, to you asked for this but based on the data you provided to us, we’ve tailored what we come back to you with,” said Barnes-Cook. “It should streamline renewal decisions because you have a better lens on the relative risk of each of your customers.”

The Digital Insurance report also highlights that customer experience is still the biggest priority for digital transformation: 48% of carrier and broker respondents rank it as the top priority; 85% put it in the top three. There is a dip in telematics, internet of things (IoT) and telemetry pilots over the next 18 months, according to carrier and broker respondents. 

“This indicates that insurers may be pausing new deployments in favor of analyzing the data they’ve gleaned from IoT efforts over the years or putting a data groundwork in place before launching new ones,” the report states.

The Capco findings also suggest that consumers are feeling inflation pressure and are looking for more affordable premiums.

“Partnerships between insurers and external parties will facilitate creative solutions in both product scope and market reach,” Renner said. “Carriers should be refining the capabilities required to simplify data exchange and the flow of digital interactions across the ecosystems that are now such a strategic focus for the industry. At the same time, they will need to navigate a range of associated technical, security and regulatory challenges that will impact both their legacy portfolio and fresh initiatives.” 

The Capco survey shows that women and older adults above the age of 55 are the least comfortable with sharing personal data. However, only 5% of respondents suggested they don’t trust their insurers with their data. 

Lance Levy, CEO of Capco, said in a statement: “U.S. insurers made huge leaps during the pandemic in terms of digital maturation and are now better equipped to drive digital enablement. The learnings and innovations from this period will be incredibly valuable as insurers investigate new ways to build truly personalized product offerings for consumers.”