More consumers willing to share lifestyle data for behavior-based insurance premiums

But their level of trust in data security is dropping, prompting insurers to rethink approaches.

While consumers are more willing to share personal data, their concerns about intrusiveness and its impact on premiums have grown as their confidence in insurers’ ability to look after their data has diminished. (Photo: Tex vector/Shutterstock.com)

There’s good news and bad news for insurance providers. First, the good news: The number of consumers willing to share significant data with insurers about their health and other lifestyle-related habits to reduce premiums has increased over the past two years, according to a new report from the global professional services company Accenture.

On the other hand, consumer trust in insurers’ ability to keep that data safe has dropped.

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“Consumers are embracing the data-for-personalized-pricing trend and want insurers to reward their efforts to improve their well-being, but it comes with a warning that trust is waning, and they want to feel in control of their data,” Kenneth Saldanha, who leads Accenture’s Insurance industry group globally, said in a statement. “Insurers are creating tech-driven partnerships to provide their customers with flexible, personalized insurance offerings based on behavior, but they’ll need to be transparent and responsible with their customers’ data for these partnerships to succeed. To earn consumers’ trust, insurers will need to show that their customers’ well-being is at the core of their business.”

Based on a survey of more than 47,000 consumers, Accenture’s latest “Global Insurance Consumer Study” provides a view of consumer preferences and trends in insurance, building on similar reports from 2019 and 2017.

At a time when insurers are launching tech-driven partnerships to improve customer wellness, approximately seven out of 10 consumers (69%) say they would share significant data on their health, exercise, and driving habits in exchange for lower prices from their insurers, compared with 58% two years ago. In addition, two-thirds of consumers say they would also share significant data for personalized services to prevent injury and loss — up from 54% in the 2019 report.

But while consumers are more willing to share personal data, their concerns about intrusiveness and its impact on premiums have grown as their confidence in insurers’ ability to look after their data has diminished. Just under a third of consumers say they significantly trust insurers to look after their data, down from 40% in the 2019 report.

The digitization of health insurance

The report suggests that insurers need to re-evaluate the role of a human workforce, particularly as COVID-19 has drastically accelerated the industry’s adoption of digital insurance services. Consumers still trust human advisors more than digital touchpoints for certain services. Half of consumers say they trust a human advisor in a branch when making an insurance claim, while only 12% trust an automated digital service (and only 7% trust a chatbot).

“Insurers still have much to do to fully address new customer behavior caused by the pandemic, including permanently raised expectations regarding digital experiences,” Todd Staehle, who leads the insurance industry group for Accenture Interactive, said in a statement. “Insurers need to master a delicate balance, offering simple, self-service digital options as well as the human touch for more complex issues that require empathy or nuanced advice. In order to embrace long-term change, it’s critical for insurers to empower their people with the right insights and technologies to better serve customers and increase trust.”

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