Insurance companies hesitate to leverage big data -- but things are changing
Insurance companies are mostly reluctant to use big data analytics to rate their customers’ driving habits, but the trend is slowly picking up pace, a new report by PTOLEMUS Consulting Group says.
The report is based on an analysis of the world’s 27 largest usage-based insurance (UBI) policies, including those of Admiral, Allianz, Allstate, AXA, Generali, Desjardins, Direct Line, State Farm, The Hartford, UnipolSai, Uniqa and Zurich. It says the number of UBI policies reached 14 million at the end of Q3 this year, but things are still slow.
Global telematics insurer Progressive still uses a temporary device and doesn’t collect GPS data, while Unipool collects just mileage data. "We believe however that the prehistoric age of connected insurance analytics is ending", the company says in a press release following the report.
"The era was based on the premise that all policyholders are reluctant to be “tracked”. But with most of us giving daily credit card, fingerprint, driving speed or location details to companies such as Apple, BMW or Vodafone, how to make sense of the self-censorship insurers apply to their programs?", adds Unipol.
It says that customers would benefit from giving their insurance more data, especially careful drivers. Now that the "prehistoric era" of connected insurance analytics is ending, companies are slowly moving. The report says Progressive, Generali, Allstate and Unipool all made different moves in the direction of using big data for the creation of better offers.
The majority of companies, however, is yet to make their move, which is why PTOLEMUS published the Connected Insurance Analytics (CIA) report -- a step-by-step guide to advanced analytics.
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