Insurers should balance benefits and effects of data sharing

Insurers should balance benefits and effects of data sharing

Staff Reporter

As insurance companies embrace the use of digital data, they must remain cognisant of balancing its benefits and effects by ensuring that clients are comfortable either with use of the data or sharing such data, Insurance 24 has learnt.

This was said by Emeritus Re Head Reassurance and Underwriting, Clementine Chinyuku during a Claims and Underwriting Webinar organized by Women In Insurance on Friday last week.

Chinyuku said the use of incentives to stimulate appetite to move to digital data use could not be under-played ( carrot & stick) .

“The cost of data is quite high so as we embrace this dimension we need to explore ways of making it as efficient as possible without inconveniencing the client for example connection of SMS directly to our web browser or using WhatsApp While going digital is extremely advocated for, let us not use it just for the sake of being noted as using digital data but for the real benefit. We must remain cognizant of data protection issues,” she said.

The webinar was looking at the how Digital Data is transforming the Underwriting and Claims process.

Chinyuku noted the use of digital forms will help a company to reduce costs, streamline business processes and improve efficiency as the ability to collect and analyse data effectively is increasingly important to businesses.

Speed and Efficiency were also noted to be the most obvious advantage of digital in-field data collection over paper as data quality is improved, for example, instead of receiving a drawing of the accident one can get a photo which more accurately describes the situation.

She noted that access to digital data improves efficiencies because as one gets more information digitally he/she is able to price the risk more correctly and per individual.

“For example with information of mileage driven by a client instead of a generic pricing system you can tailor make it to the client and the client is charged for the actual mileage they drive.  With working from home this  digital solution of PAY AS YOU DRIVE is a game changer being used currently locally and the benefits are immense  as some people have had their cars parked for 3 months,”
She said

“Apart from mileage the same device fitted to the care can collect data on driver behaviour such as speeding, or hard braking and rewards given for good behavior for example premium discounts or partnership with fuel suppliers where one can receive a discount on their fuel purchase. The same device can immediately report if you have been involved in an accident and road side assistance can be directed to your location.”

On the other hand ,while the use of drone technology for insurance has been on the increase in other jurisdictions , Chinyuku said  in Zimbabwe this remained an area that need  to be explored as there were still restrictions regards the airspace .

The use of drone technology has been on the increase in many fields for example during live streaming of soccer matches.  In Rwanda drone technology is being used for delivery of medication. The same technology can be used in agriculture insurance for risk assessment in underwriting as well as claims assessment for example in large fire claims or even accident claims.

Drones can particularly play a significant role while settling agricultural insurances, as they assess the actual yield and cultivable land.

“An analysis conducted by IPEC suggested in a recent training for journalists that, fraud comprises about 20-30% of insurance losses.. Drones can play a part in all the stages of the insurance lifecycle, especially claims management and fraud.  Allstate insurance company is among the very first companies to employ the use of drones. The company depends on drones to conduct random inspections of vehicles and other insurable risks, thus saving time and resource. Insurers like State Farm are using their drones for property assessments” she said.