By Brad Smith, TurnOnVPN —
With technology disrupting so many aspects of insurance, insurers are under increasing pressure to update their business model. On one hand, InsurTech startups are attracting young customers and investors with innovation and newness; on the other, tech giants like Amazon are entering the field with immense resources and digital expertise. Established players need to catch up, and they need to do it fast. But is this race towards innovation forcing them to leave privacy concerns behind? In the information age, where do insurers stand when it comes to data privacy and security?
“Show me your Apple watch, I’ll tell you who you are.”
For a data-based industry such as insurance, the Internet of Things (IoT) is a gold mine. IoT devices like smartphones, Google Home, or Apple watches are a source of intimate data, giving insurers much better insight into your life than a standard underwriting form. Thanks to technology, insurers no longer need to rely on indirect indicators, such as age or gender. Access to your fitness tracker or a driving app tells them a lot more about your lifestyle, habits, and preferences than any conventional questionnaire. No wonder, then, that some health insurers are already switching over to using IoT devices exclusively for policy underwriting.
All this is great for insurers, but what does it mean for the customer? As critics aptly pointed out, IoT devices are problematic when it comes to data security. Not only are data breaches common – when they do happen, most IoT companies can’t detect them and address the problem accordingly.
There are ways to secure your IoT devices even if you don’t have advanced IT knowledge. For example, a VPN router essentially protects your entire family from privacy invasion by encrypting the internet traffic on all connected devices. This is a good solution for appliances like Google Home that stay connected to your home Wi-Fi. In case of devices on the go, however, you’re exposed to cyberthreat as soon as you leave your internet’s range.
Will you be Facebook friends with your insurer?
The answer is probably not. But in the state of New York, life insurance companies can legally use your social media to determine premiums. And even if you live elsewhere, you can’t necessarily feel completely safe. Most countries have very little legal guidance on social media use for underwriting – a grey area of which insurers can take advantage.
Similarly to data harnessed from IoT devices, social media activity gives insurers a unique perspective that you wouldn’t share with them in an official questionnaire. They can find out whether you’re likely to engage in risky activities (think twice before posting that skydiving photo or taking a selfie while driving) and how much you care about security (posting holiday pictures while away is a no-no because it immediately lets thieves know your house is vacant). So even if you think your Instagram posts are perfectly innocent, it’s a good idea to revisit the privacy settings. You never know what information might turn out to be useful to third parties.
The hidden cost of your DNA test
If you think that DNA test kits are surprisingly affordable, you’re onto something. The real money from DNA testing is in selling the results to third parties – a popular DNA testing company 23andme has sold its database to a pharmaceutical company, and they’re not the only ones making millions that way.
Naturally, insurance companies are taking a keen interest in data insights from DNA testing, too. Especially when it comes to life insurance, where potential policyholders are required to disclose any medically relevant information during the underwriting process, insurers are starting to ask about genetic tests as well. Could your results harm your chance of getting lower premiums? It’s not out of the picture.
Technological advances give insurers opportunities like never before: better underwriting, faster operations, attracting new customers with lower prices. Will they weigh our data privacy against all these benefits, or will privacy concerns be left behind in the race towards innovation?
About The Author
Brad Smith is a technology expert at TurnOnVPN, a non-profit promoting a safe, secure, and censor-free internet. He writes about his dream for a free internet and unravels the horror behind big techs.
#TurnOnVPN is a non-profit VPN advocacy blog focusing on a free and unimpeded internet for all. We take part in numerous online events, aimed at promoting a safe, secure, and censor-free Internet. Learn more at www.turnonvpn.org/blog.
All images courtesy of pixabay.com.