Matt Josefowicz over at Novarica had an interesting blog last week that examined three issues that he feels will have a huge effect on the insurance industry over the course of the next decade.

The three points are:

Using third-party data rather than the information an insurer spends time collecting itself to make underwriting decisions.

The continuing debate on the future of insurance agents

Now that the federal government has mandated profit margin caps for health insurers will it turn its sites on the P&C and life sides?

I don't want to steal all of Matt's thoughts—just some—but I wanted to share some thoughts on the underwriting issue.

An article in the Wall Street Journal in November reports on a pilot project conducted by Deloitte Consulting for the U.S. arm of the life insurer Aviva that tested the insurer's ability to underwrite 60,000 policies using commercially-available data.

The crux of the matter is life insurers—and no doubt those on the property/casualty side as well—can learn more than enough information about potential policyholders by what they can gather through the policy applicants' shopping habits and social media postings, presumably at a faster pace and with less expense.

For those who follow the "my life is an open book" policy this could result in some interesting facts turning up that applicants might not ordinarily be willing to share with their insurer or which blood tests don't always disclose.

For example, the article points out that some life insurance applicants might not be willing to disclose cancer histories in their families, but they are regular contributors and/or participants in cancer-related activities and organizations.

The point here is privacy is a thing of the past and businesses—specifically insurance carriers—are smart to take advantage of it.

I'm not sure how P&C carriers can use analytics to turn third-party data into good underwriting, but those companies that don't at least search for new ways to do things are wasting opportunities. We're an information-rich society and with more of us willing to share that information than ever before there has to be some useful advantages to be seized from it. It's just a matter of time.

* * *

Still another reason why you should be involved in social networking: The pope has given his imprimatur to today's communication technology.

He does make a good point, though. In a message for the Catholic Church's World Day of Communications he said:

"It is important always to remember that virtual contact cannot and must not take the place of direct human contact with people at every level of our lives."

Alas, the pope doesn't have a Facebook page yet, but he's sure to have lots of friends once he does.

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Technology Continues Changing Insurance Landscape

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