November 05, 2019
Not on tiptop form? Things will be better tomorrow. In the future, epidemics are treated before they arise, hurricanes avoided before they even start, and cancers cured before they develop. So what is a risk-free life like?
A world under constant watch
“Who knows what tomorrow will bring?” our grandparents used to say. Because the future was a blind obstacle course in a maze of risks and opportunities, limiting damage was a daily concern. But that was before. In the 21st century, we are now beginning to know what tomorrow will bring. With big data, artificial intelligence and technomedicine, technology is pushing back the boundaries of human abilities and disconcerting health care and insurance professionals.
By studying health data and information from connected objects, life on Earth is gradually being placed under constant watch. While we have long been able to anticipate flu epidemics by analysing Google searches (“tiredness”, “aching”, etc.), start-ups are now positioning themselves directly in the data + artificial intelligence niche to track the signs of future illnesses. This is the case of Lapetus Solutions, which promises to predict the life expectancy of an individual based on a simple selfie. Chronos, their face recognition technology, analyses biological, genetic and behavioural traits and determines the mortality risk to decide whether or not a candidate is eligible for life insurance. These innovations have direct consequences in the insurance sector: we no longer analyse a client's past via their wealth or background; we focus on their everyday life, or even their future, by analysing the data they produce every day.
Pay as you risk
Little by little, "behavioural insurance" initiatives are emerging, encouraging incursions into the everyday lives of insureds: in the United States for example, Amazon offers the possibility of connecting home automation solutions (cameras, presence detectors, alarms, etc.) to insurance companies to better protect American homes.
In Italy, BNP Paribas Cardif also launched a home automation-based insurance policy in 2014. Going by the name H@bitat Homebox, this prevention product integrates a home automation box, and smoke, flood and power failure detectors. If a problem occurs, the client receives a text message, email or phone call. As a result, the number of claims has dropped by 20% compared to a conventional product.
Detectors are also finding their way into our cars, to ensure that we drive safely, and rising start-ups such as Otherwise and WeCover offer to calibrate health or car insurance prices (according) to individual habits. The US insurance giant John Hancock will even bring the price down in return for using a smart watch. In France, the Evin Act prohibits insurers from pricing their products based on behavioural data captured by connected objects, but if the situation changes, would policyholders be prepared to share their health records with their insurer? Across the Atlantic, a recent survey by Rock Health suggests they would: 49% of respondents said they would reveal their health data to their insurance company, whereas only 11% would to a tech company. The question remains of how they would react if their insurer partnered up with such a firm. See John Hancock - Vitalilty - How it works ?
While each new privacy-invading innovation undoubtedly brings Big Brother effects to mind, the upside is that people are turning their attention to their health data and the risks they take. How many years' life expectancy will I gain from exercising daily? What are the chances of this trip around the world being a success? With risk assessment being guided, and therefore drastically changed, by a whole new load of information, insurance is progressively becoming a joint production between insurer and policyholder. In the United States, insurance companies such as Liberty Mutual have adopted the Alexa virtual voice assistant to help their clients understand and compare offers, but also to find a local agent. Already at the end of 2017 in France, eight in ten bank and insurance executives said they had conversational agent (voice assistant or chatbot) projects in the pipeline for 2018.
Furthermore, on a reassuring note, access to personal data is an increasingly secure process. And thanks to smart contracts using blockchain technology, data relating to delayed flights or bad weather are automatically cross-checked with the insured's information, and compensation is therefore paid out faster, and with optimal security.
A risk-free world is not enough
As you can see, in the future, “prevention is better than cure”. But in this incident-free world, we should not just focus on the “death of death”, but on the end of our worries overall. Researchers in the United States are already tackling the cells responsible for ageing and in France, Dr. Newton Howard and his start-up ni2o are working on a neural implant which repairs failing brain functions. Once we are rid of concerns about death and everyday troubles, won't our existence be rather dreary? And what if, on the contrary, tomorrow's insurance no longer allowed us to endanger our health without caring?
No one wants a bland future: senior citizens would rather have fun than treatment, young people prefer exhilaration to safety, and the others will always choose a real challenge over a battle that is already won. In this context, insurance becomes a coach, helping people to choose their risks. Because precisely mapping threats also means targeting the loopholes without the hazards. After the era of "tech for good", we may see the advent of "tech for bad": thanks to progress, we will finally be able to take the “right” risks... and come out without a scratch.
A risk-management system like this would also restore the balance between different types of policyholders, from the strongest to the most vulnerable. By reducing the risks of the former thanks to data, the sector could generate a margin to better protect the latter. The 90% success rate of the young dietician, who goes out jogging every week, would complete the 10% score of her asthmatic grandfather. Risk and cost sharing would then become the backbone of insurance more than ever before.
It was bound to happen: how could the risk experts ignore predictive technologies? The transformation is taking place, and insurance professionals must now develop the right safeguards to avoid invading their policyholders' privacy. After that, they will be more than ever a daily safety net, enabling people to leap at life's chances, confident of success.
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