Technology is developing at a fast pace and will not stop. AI & Machine Learning are certainly to play an ever-greater role in every industry and vertical. Insurers are riding on technology to put together key data points for analytics to help them to manage risk better. The thing here is that although technology may make far higher levels of data available who has the permission to use it and what safeguards are there in place?
Today, there are already companies pitching “lifestyle” data which translates to a future where everything you do may determine how much you pay for health insurance. These include the things you buy, the food you eat, the amount of exercise you get done, your health records and so on. The first question here is who is accountable if say an AI algorithm misses a sign of serious illness or makes a misdiagnosis?
So what is the impact on how are policies priced to consumers? Just as in car insurance, the development of apps and IoT devices help provide far richer data on the individual's driving patterns. The potential therefore to adjust premiums per individual is clear. What if insurers tracked your race, education, social media habits, marital status, net worth, bill payments? They then feed this information into complicated computer algorithms that chart out predictions about how much your health care could cost them. But how ethical will that be? Should a person’s premium be raised because algorithms say they are more likely to run up medical bills.
Patient advocates have warned that using unverified “lifestyle” data to make medical assumptions could lead insurers to improperly price plans. Some data scientists have also said that concluding about health risks through such data could lead to a bias against certain groups like poor people to be charged more, making it harder for them to get the care they need.
The fact is that the future of health insurance pricing is definitely going to be tagged to more data points especially with the advancement of technology. For us as consumers, the best way around it is really to start building good habits that will attribute to great health. Not to save on insurance premiums, but to live better, free from ailments to enjoy life to the fullest.
At Insuree, we are strong advocates of being healthy as we believe that a healthy lifestyle is key to a fulfilled life. To top it off, insurance should be valued to add to that peace of mind in life. So get out there, take in that soul food, clock that work out and attain mindfulness!