Key Finding 2
Status of the Industry: Insurers Have the Will and the Way to Track Your Digital Footprint (In Fact, They’re Already Doing It)
Do U.S. auto insurance companies track your digital footprint? What we know:
1. They have the need.
– Insurance companies want as much data as they can get their hands on to better evaluate risk, determine your rates, and remain competitive.
– Many financial services companies are already using your online data to tell if you’re a good customer (without you even realizing it), substantiating the use of data to indicate risk.
2. They have the ability.
– Insurance companies have the technical ability to track your online activity today — whether by interacting with consumers online, tracking behavior through telematics or usage-based insurance devices, or simply purchasing data about consumers.
– Property and casualty insurers admit they are investing in new digital monitoring technologies such as predictive modeling, social media tracking, and text mining.
3. They are already doing it.
– Insurers are already tracking your online activity for purposes other than setting rates, such as fraud detection, claims processing, and marketing.
– Insurers in most states engage in price optimization, in which an insurer uses online behavior monitoring and predictive modeling to gauge whether a customer will accept a price increase or not. (Many consumers and regulators say price optimization is unfair because it could charge consumers with the same risk level different rates for the same coverage. Price optimization is now restricted or prohibited in 20 states.)