A couple months ago, National Underwriter Life & Health Magazine published an issue focused on technology. Some of the articles got me thinking about the dynamic we in the benefits world face between the use of technology in our business and personal privacy. A couple of the trends noted were the use of big data and wearable technology as a means of underwriting insurance products.
This information got me thinking about whether these trends represent a great marketing opportunity or an invasion of privacy. I wrote a list of things that are available for most people if big data principles are used to aggregate information. Some of those things included: age and gender; where we live; whether we own a home or rent; who insures our residence and the limits on coverage; our driving record; our credit rating; our level of exercise (wearable tech); what medications we take (pharmacy scan); and what health related items we look up online. (See more in the sidebar, right).
There is other big data about us available; we probably don't want to know how much. It started me thinking about how an insurer could use big data to research people from public sources or sources that sell data, combined with information from wearable technology so personalized offers could be made. The problem in the voluntary benefits world is that these personalized offers get away from the concept of benefits that feature affordable guaranteed issue, which is one of the drivers of the popularity of voluntary benefits.
It could move benefits toward the kind of underwriting and product pricing that's common in the individual world (ultra preferred, preferred, standard, special risk, decline). The guaranteed issue/affordable price concept would be lost. When you combine discounts for the healthy with penalties for the not-so-healthy, at some point the price point of the penalties may be too high to make sense to the buyer. And if the price of a voluntary plan reflects the health status of an employee, is that an invasion of the privacy of the employees who must pay more? Will employees be uncomfortable if employers can derive their general health from their voluntary benefit plan pricing?
I am sharing this with you to get a reaction from a sample of people involved in marketing benefits. What do you think: Is this a marketing opportunity, a personal privacy nightmare for employees, or both? And in the end, how will our employer and employee customers see this—as a good thing for them—or not? Please send me an email with your thoughts, and I will cover further ideas in this area in a future column.
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