“For homeowners carriers, accuracy in pricing is a little bit more difficult because homeowners characteristics are less homogeneous in nature. Specifically naming some examples would be amount of insurance, protection class, age of dwelling as well as square footage just to name a few.
As a result, homeowners carriers have in recent years started to invest more in utilization of data analytics to improve pricing integrity. Greater access to data sources and more widely accepted or adopted by-peril pricing earlier and credit scoring all have in many ways leveraged the playing field within the homeowners marketplace.
Companies also have started to leverage technology in other facets of insurance operations such as claims, data as well as distribution. Technology has helped homeowners insurers to improve the customer experience through artificial intelligence as well as mobile app technologies.
As well, through these mobile apps, homes are now being equipped. Essentially, you have smartphones, smart TVs. You now have smart homes. These homes are equipped with smoke detectors and carbon monoxide detectors as well as security systems, water leak detectors, thermostat controls, and all sorts of technology that you can manage through basically a few taps of your cell phone.
These consumer-friendly services are intended to improve the customer experience. As I have mentioned previously as well, they were designed to essentially help insurance carriers more accurately understand the insurance risk as well as better price their products.
Ultimately, the consumers still have yet to embrace big data analytics within the insurance company environment because of the fact that there have been some concerns from a privacy perspective as well as overall cybersecurity risk.”
Senior Financial Analyst