The types of information collected by life insurance companies are usually determined by the amount of coverage you want, the policy type, and the underwriting procedure they utilize. Your age and health may also play a role.
The most information is received from sources such as those listed below for fully underwritten policies. Many of these same sources are used in accelerated underwriting, with the exception of the medical exam. In addition, the simplified issue underwriting procedure may rely on limited third-party data.
Information From You
Prepare your coffee. According to the Society of Actuaries, a life insurance application might have up to 60 questions. You’ll be quizzed on your age, personal medical history and mental health, family medical history, and whether or not you use tobacco. There will also be inquiries into your driving record, harmful hobbies, and any prospective trip plans to dangerous regions.
To verify your identification, insurance providers will ask for personal information such as your Social Security number and birth date. They may also want to know your annual wage because it may limit the amount of insurance you may acquire based on it.
It’s critical to be truthful while answering questions. Keep in mind that insurers will double-check a lot of the information you provide with other sources. Incorrect responses may void your insurance policy in the future.
Electronic Health Records
Life insurance businesses have benefited from the availability of electronic health records. They can get rid of the outdated procedure of requesting an Attending Physician Statement (APS) on an applicant through phone or fax by accessing digital medical records. Firms that help insurers obtain medical records are known as records-request companies.
Your life insurance application will include a HIPAA-compliant consent form for you to sign if an insurer requests your medical records.
Since 2014, health-care providers have been obligated by federal law to keep electronic health records. Life insurers can use electronic health information to speed up the application process and, in some situations, eliminate the need for a medical exam.
Previous Life Insurance Applications
Individual health and life insurance applications are gathered by MIB Group. If you’ve ever applied for insurance with one of MIB’s member businesses, it’s likely that they have a record of you. Insurers can check to see whether your previous responses contradict what you’ve indicated on a new application. You can acquire a free copy of your MIB file.
MIB does not have information about your workplace’s group life or health insurance.
From Pharmaceutical Databases
Life insurance firms will find out if you’re taking medication for high blood pressure, diabetes, depression, or anything else. They check your prescription drug history using third-party companies like Milliman Intelliscript.
From a Life Insurance Medical Exam
A medical exam, also known as a paramedical exam, is usually required for a fully underwritten life insurance policy to identify if you have any medical issues that could affect the amount you pay.
Carriers like ExamOne and APPS are used by insurance companies to send a nurse or paramedical professional to your home or business. They’ll probably measure your height, weight, and blood pressure, as well as take blood and urine samples (which can detect nicotine and drug use, among other things).
Depending on your age or health, some insurers may require an EKG and/or cognitive assessment.
From Your Motor Vehicle Report
You’re submitting a life insurance application, not a car insurance application. So, why would an insurance company want to look into your driving history? You may be a higher risk as a policyholder if you have received speeding tickets or other offences such as DUIs.
From Your Credit
For life insurance firms, your credit may also appear to be an odd source of information. According to the Society of Actuaries, they may examine your credit. Credit scores can help determine your “mortality,” or life expectancy. LexisNexis, an analytics firm, sells its Risk Classifier score to life insurance, for example. Your credit, driving history, and other public records-based criteria are all factored into your score.
From Public Records
Insurers can look up your personal information in public records, find out what property you own, see whether you have a criminal past, and look for other information that might indicate you’re a riskier applicant.
From Financial Statements
Insurance companies may need more information to verify your financial condition if you apply for life insurance beyond a particular sum. Ameritas, for example, will demand to see tax returns or income statements, as well as a list of assets certified by an accountant, for applicants who seek a life insurance policy worth more than $5 million.
From Your Social Media Accounts
Anything you share on social media has the potential to backfire. Even when applying for life insurance, this is true. According to a poll conducted by Lewis & Ellis Actuaries and Consultants, most insurance firms scan social media sites as part of their underwriting process. The majority of people use Google, although some also use LinkedIn, Facebook, Instagram, or Twitter.
Do auto insurance companies share data?
“When it comes to vehicle insurance, there are various federal privacy laws as well as state-regulated legislation that protect your data. While you agree to give vehicle insurance companies access to your credit report and driving record, they rarely share this information with others.
Do insurance companies communicate with each other?
While car insurance firms do not communicate directly with one another, they do share data. A database called the Comprehensive Loss Underwriting Exchange gives all vehicle insurance providers access to your claims history (CLUE). Other similar statistics will be used to determine your risk.
What do insurance companies do with data?
Issue: As insurers collect more detailed information on their customers, state insurance regulators need a better understanding of what data is accessible, how it is utilized, and if it should be used. Big data is a term that describes a large amount of data as well as the technologies that analyze and manage it. While big data can help insurers with underwriting, rating, marketing, and claim settlement, it’s up to insurance regulators to determine if it’s good or damaging to consumers. Consumers are also concerned about how acquired data is protected and how customer privacy is protected. Furthermore, state insurance regulators require information beyond that which insurers have typically provided. State insurance regulators may need to collect additional meaningful data (in addition to the financial and market behaviour data now collected) to gain a better understanding of insurers’ models and improve regulation.
Background: The digital revolution has enabled the collecting and storing of massive volumes of data from a variety of sources. Because this data is too complicated for typical data processing techniques, it is referred to as big data. Big data refers to unstructured and/or structured data that is used to affect underwriting, rating, pricing, forms, marketing, and claims management in the insurance industry. Data in tables with defined fields is referred to as structured data. Unstructured data includes items like social media posts, reports, and taped interviews, as well as images like satellite imaging. Insurers can utilize predictive analytics to foresee future events using big data. In order to make predictions, the process employs a variety of approaches, including data mining, statistical modeling, machine learning, and, in some circumstances, narrow artificial intelligence.
Underwrite, price, and incentivise risk reduction more precisely. For example, telematics allows insurers to collect real-time driver behavior and usage data in order to offer premium savings and usage-based insurance.
By personalizing products to individual preferences, you can increase the effectiveness of your marketing efforts.
Streamline the application process to increase operational efficiency. A pre-filled homeowners application is one example of this.
By applying machine learning algorithms to the outcomes, you can improve claim processing.
Improved identifying procedures will help to reduce fraud. Text analytics, for example, can spot potential “red flag” trends in adjusters’ reports.
According to Yes Magazine, Big Data has resulted in 30 percent improved insurance service access, 40-70 percent cost reductions, and 60 percent higher fraud detection rates. All disruptive technologies, however, pose obstacles. Concerns about big data include:
In the algorithms used to synthesize large data, there is a lack of transparency and the possibility of bias.
Information collection that is possibly discriminatory or sensitive to consumers’ privacy.
The age of big data has both beneficial and harmful consequences for society. State insurance regulators are responsible for ensuring that regulations and regulatory operations adequately protect consumers from damage. To help with this, the NAIC formed the Big Data (H) Working Group, which was recently joined with the Innovation and Technology (EX) Task Force’s Artificial Intelligence (EX) Working Group.
The new working group’s mandate for 2021 is to investigate the use of big data and artificial intelligence (AI) in the insurance industry, as well as to assess existing legal frameworks for controlling and monitoring their usage. They will examine current audit and certification processes, as well as data demands and essential technologies for state insurance regulators to effectively monitor the insurance industry.
The Casualty Actuarial and Statistical (C) Task Force has also released the Regulatory Review of Predictive Models White Paper, which identifies best practices for the review of predictive models and analytics filed by insurers with regulators to justify rates and provides state guidance for the review of these filings.
How do insurance companies collect data?
More than two-thirds of insurers credit predictive analytics with decreasing concerns and underwriting charges, according to Willis Towers Watson, and 60% say the resulting data has helped enhance sales and profitability.
This number is projected to rise dramatically in the coming year, as the inherent benefit of predictive analytics in insurance is demonstrated in a variety of ways.
Predictive analytics solutions may now collect data from a number of internal and external sources to better understand and forecast insureds’ behavior. To better understand and manage their relationships, claims, and underwriting, property and casualty insurance firms are collecting data from telematics, agent interactions, client interactions, smart homes, and even social media.
Predictive modeling in insurance, for example, is a closely similar technology “Insurers can use “what-if” modeling to prepare for underwriting workloads, provide data for filings, and assess the impact of a change on their book of business. The COVID-19 issue has showed insurers how important it is to be able to foresee change, and “What-if” modeling is an excellent tool for carriers that know they need to make changes but want to be sure they do so correctly. Insurance software with the correct predictive modeling may help define and deliver rate changes and new products more quickly.
Here are 11 ways predictive analytics in P&C insurance will change the game in 2021, based on the wealth of data presently available.
Do insurance companies cross check?
A basic cross-check is one of the simplest ways for insurers to catch criminals. All that is required is that they look for simple patterns in the checks they send out to cover claims. If you receive multiple checks from the same person, that’s a red flag. Payment of multiple large claims to the same address, even though the name on the check is different, is also illegal. It’s not rocket science, but it gets the job done.
Cross-checking isn’t just restricted to an insurer’s database. Thousands of insurance firms, self-insured businesses, and third-party administrators use ISO ClaimSearch, an anti-fraud information system, to submit all of their claims. Insurance Services Office, Inc. developed the system, which covers car, property, and liability claims. Cross-checking a new claim against the entire database (+100 million) makes it easier to detect staged-accident rings, people who file several claims for the same loss, and other scams.
What database do car insurance companies use?
The Motor Insurers Bureau (MIB) manages CUE, which is one of two important databases used to combat insurance fraud. The other is the Motor Insurers Anti-Fraud and Theft Register (MIAFTR), which keeps track of automobiles that have been written off or stolen.
Do insurance companies have a central database?
The Claims and Underwriting Exchange (CUE) is a central database that contains information on all incidents reported to insurance companies. CUE isn’t only for home insurance; it also has over 30 million records for car and personal injury covers.
CUE’s major goal is to combat fraud. Because insurance carriers have a single source of information regarding policyholders and occurrences, they can quickly check if they suspect something isn’t quite right. This aids in the detection of bogus claims.
In 2016, identified insurance fraud totaled £1,276 million from 125,000 claims across all categories of insurance. According to the Association of British Insurers, this adds roughly £50 per year to the average insurance bill.
More home insurance terms and phrases you’d like to learn more about? See our dictionary of home insurance terms.
Are insurance claims public knowledge?
Home insurance claims are, in fact, public information. Under the F.A.C.T. Act, both parties’ right to obtain insurance information is safeguarded by law. If someone is interested in seeing the record, they can request a copy of the policy.
Can I refuse to give my insurance details?
- Exchange names and other information with the other drivers, as well as the names and contact information for any independent witnesses. If someone refuses to provide you with their information, your insurance company may be able to track them down using their vehicle registration number.
- Even if you don’t intend to file a claim, notify your insurance as soon as possible about the accident.
- If someone is hurt, show the police your insurance certificate or cover note. If you are unable to do so on the spot, you must take the documents to the police station within seven days.
- Take images that you can use as proof if you need to file a claim later.
If you have comprehensive insurance
If you have a comprehensive insurance, you should file a claim with your own insurer; but, if the insurer is unable to recover the money from the other driver’s insurer, you may forfeit your no claims bonus.
Any injuries or losses not covered by your own policy can still be claimed from the other driver’s insurer. These are known as uninsured losses, and they can include things like alternate transportation while your vehicle is being repaired, lost wages, personal injuries, and your policy’s excess.
Any losses should be kept to a minimal and evidence should be kept. If you need to hire a different car, it should be identical to your own.
To file a claim, obtain a form from your insurance company or write to the other driver’s insurance company, detailing the accident and the other driver’s policy number. Inform your insurer of any independent witnesses and, if possible, send them witness testimonies. If you purchased your coverage through a broker or agent, they may be able to assist you. Make sure you keep copies of any important documents and correspondence.
If you have third party insurance
You should file a claim against the other driver and let the insurance company decide who is at fault. If they say you’re accountable, you’ll be responsible for your own vehicle’s repairs.
To make a claim against the other motorist, let them know in writing that you intend to make a claim against them. Let the company know what happened if they were driving a work car. This is something you should inform your own insurer about. The other driver should notify their own insurance company about the accident. You can contact the Motor Insurance Database to see if the other driver has insurance.
If you’ve been in an accident and the other motorist or their insurer sends you a letter or claim form, forward it to your own insurer.