I got an email yesterday from GEICO. They were encouraging my kids who are currently on the family auto insurance policy to consider getting their own policies. I am probably being a little naive, but hoping when they call they will see a GEICO which has analyzed under the-25 driver pool and come to the same realization some non-US insurers have come to – the daily commute details (when, where, how long) are far better risk predictors than age of driver.
I am talking to a friend who consults to the healthcare industry. In his view, no matter what happens to Obamacare, the wheels are in motion. Risk and accountability are moving to providers, and the payers will have to reduce pricing to reflect their administrative role more than their insurance role. And some payers will acquire providers to keep those old margins.
A European auto insurance company tells me they are piloting a policy they can issue with only two data elements of information from an applicant. A travel insurance company tells me they are serving up billions of offers via travel sites – no additional user information needed.
Climate Corp (being acquired by Monsanto) brought highly sophisticated algorithms to a specialty issuance area – farms. Its data science and its (non) claims process have forced many insurance companies to wake up and consider disrupting their own operations.
Insurance has always been about lots of data (remember actuaries?) and lots of legal mumbo jumbo. The data scientists are starting to win. It will take time to get to us an individuals but it is happening in subtle and radical ways.
And so, I fully expect my flood insurance company to continue to forget to send renewal information to my mortgage company. Happens every single year:)
