Big data is too tantalizing of a opportunity for the insurance sector to pass up.
As ProPublica recently reported, American insurers are wielding mind-blowing amounts of sensitive information about hundreds of millions of individuals to their advantage: how much education they have obtained, where they live, what they eat, what TV shows they watch and how much they earn to estimate their future medical bills and potentially determine how much they pay for insurance.
To these companies, big data is a natural progression of using whatever information is at their disposal to inform their business practice.
“We sit on oceans of data," Eric McCulley, director of strategic solutions for LexisNexis Risk Solutions, explained to ProPublica. "The fact is, our data is in the public domain. We didn’t put it out there.”
Perhaps unsurprisingly, a survey of 1,000 adult Americans by fintech startup LendEDU reveals the vast majority of consumers want insurance companies as far away from their data as possible.
Among their key findings:
- 15% of respondents believe insurance companies should be allowed to use big data to determine risk in a potential insurance policy. 72% stated that this should not be allowed.
- 55% of respondents believe insurance companies accessing private data is equally as threatening as tech companies doing the same.
- 18% of respondents would be OK with insurance companies having access to their DNA if it meant they could qualify for a cheaper insurance policy.
"The day is surely coming when it may be impossible to get insurance coverage of any sort without a company accessing your personal information."
The pushback from consumers weary of invasions of privacy is to be expected, especially given the unflattering headlines Facebook has grabbed of late for similar reasons. Skepticism from consumers is warranted as the Pandora’s box of big data can likely never be closed as far as insurance companies are concerned.
James Heidebrecht, an insurance professional and owner of Policy Architects, commented on the study with a warning: "Anyone sharing personal data with a life or health insurance company does so at their own peril. However, the cat's out of the bag and it already may be too late. Tech-dependent millennials live in a privacy-free world and an unbelievable amount of their data is available to be aggregated. The day is surely coming when it may be impossible to get insurance coverage of any sort without a company accessing your personal information."