In insurance Big Data could lower rates for optimistic tweeters
By Brenna Hughes Neghaiwi
ZURICH (Reuters) - When people take to Twitter to comment on the great evening they enjoyed with good food and wonderful friends, reducing their monthly insurance bill is probably the last thing on their mind.
But such tweets could help insurers to price premiums for individuals, with research suggesting a direct link between positive posts and a reduced risk of heart disease.
This could lead to future insurance cover based on "sentiment analysis", in which Big Data and artificial intelligence make predictive models ever more accurate.
Swiss Re (SRENH.S: Quote) says technological advances will cut the price of insurance protection and help individuals and firms make better decisions through programs that offer advice and incentivise improvements in areas such as health and driving.
However, detractors fret that such developments could erode customers' privacy or lead to increasingly personalized pricing, undermining the basic principle of insurance - sharing risk.
Social media monitoring is one of several advances insurers are examining to improve the pricing of policies.
As part of its data push, Swiss Re, the world's second-largest reinsurer, has invested in digi.me, a startup aiming to let consumers store personal data culled across various social media channels and beyond and to exchange their data with businesses for personalized deals.
"In a relatively short period of time, maybe a few years, most of the major insurers will have integrated lessons from behavioral research," Swiss Re's head of digital analytics catalysts, Daniel Ryan, told Reuters. "Undoubtedly, it will lead to a different interaction between insurer and policyholders." Continued...