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Big Data or Big Brother? – The unsure future of insurance costs

Impounded Car Insurance UK – Report on Big Data proposals by insurance companies

As methods for calculating your car insurance costs become increasingly advanced, is there cause for concern? Or are you getting a better deal? The current system of social averages does seem outdated when placed next to a new solution such as the ‘Snapshot’ device, but can these devices really be used in our favour?

Mike Fitzgerald from research firm Celent believes so. He describes the current assessment method as “sloppy” in comparison to the possibilities, and states that “Most people are actually overpaying.” As it stands, car insurers have your age, gender and type of car, a meagre amount of data when it comes to assessing your ability as a driver and the risk you carry, forcing insurers to stereotype their customers. As Fitzgerald puts it, “We’re taking tens of thousands of people and saying they all have the same risk profile when in fact they don’t.”

This is why from Tesco Bank in the UK, to Generali Group in Italy, are attempting to convince their customers that monitoring their driving is the best thing for both of them. They want to be ahead of the curve when it comes to their competitors, you want to pay less for your insurance.

It isn’t just car insurance either. As technology becomes readily available and far more affordable, you could find insurance companies asking to monitor your life in more intimate ways to get you the best deal. Insurance advisor Jamie Yoder recently looked at how sensors, the kind used to monitor workouts, could be used to better evaluate the health of a life insurance customer.

In fact, your insurance companies may be using data you never knew they were. As a recent report indicates, insurers are currently using social media to help track you, using your social media persona to get a handle on you and your needs. Supposedly, most insurers are using social media teams.

For some, this could already be too much. Do you truly understand how this data is being used and do we have a chance to do anything about it?

It’s a good point that needs raising, considering some have already been spurned by social media, such as Nathalie Blanchard who found her health insurance benefits cut off because, while on leave from work for severe depression, her insurance company saw pictures of her smiling on Facebook.

This is definitely a worrying development, the kind of kink in the system that will have to be worked on before we can accept these new forms of data collection as the widespread norm for insurers. In the meantime though, perhaps we should focus on the positive.

If this big data can affect the behaviour of the consumers, insurance companies have the unnerving but ultimately positive ability to prevent accidents. “That’s the end game,” says Beattie, also of Celent, “insurers could not just cover losses if they occur, but actually prevent them.”

Impounded Car Insurance UK provide insurance policies designed to help you release your seized car from the compound. If your car has been Impounded, call us today on 0800 009 6828 or 0161 726 5570