Insurers hold a lot of data about their customers, so could it be possible in the future for insurers to look at someone’s salary, mortgage, debts and family situation and based upon all that information say, here’s a product created just for you?
There may well be a tipping point when big data (whatever that really is), wearable technology, online banking and insurance all meet up in a cloud based e-world where different benefits are put together, priced and sent as a ‘buy now’ pre-underwritten option straight to your phone, tailored specifically for you and your family – because they already know what they need to know.
The dawn of a new revolution for insurance?
As we saw in the latest budget from George Osborne, we are in an era of risk being transferred. We are seeing a continued retreat of the welfare state, and organisations transferring risk to individuals, meaning more than ever a generation will need to move towards insurance.
Gary Shaughnessy, chief executive for UK Life at Zurich, said the industry must be ready for the demands that would be made on it because of the welfare changes.
“It is a reality of an ageing population, and it is a reality of a changing dynamic in terms of the state’s ability to afford the welfare underpin and the taxation advantages that have been given to UK citizens.
“I would argue that it has never been more important that the insurance industry provides solutions to consumers facing a dilemma that they didn’t ask for, in some cases they benefit from, but in many cases didn’t ask for.
“There is an opportunity to make a very objective clear cut financial case to the government for incentivising the benefits of income protection. To do that we need to interact with the welfare rules.
“What we can’t have is a situation in a group environment or in the individual environment where an individual who protects themselves or a corporate that takes action to protect their employees finds they’re worse off because they lose welfare benefits. That’s not the intent of the state, but it is the reality in a minority of cases under the current rules.”
Indeed, the idea has even been floated within government by work and pensions secretary Iain Duncan Smith, that people could be encouraged to pay into ‘sick pay’ accounts to fund their own sick pay or to cover periods of unemployment, saying: “We need to support the kind of products that allow people through their lives to dip in and out when they need the money for sickness or care or unemployment.”
