A New Way of Getting Life Insurance
Absa Life, the life insurance division of Absa Bank, might be revolutionising the life insurance industry with their newest way of approving clients. 700,000 of Absa Bank's clients have been pre approved for life insurance without any medical tests or long questionnaires. How? By using big data to estimate the insurance risks a client poses. Big data refers to any large collection of data that can be used to infer information about the people that it came from.
How it All Works
Traditionally, life insurance is underwritten. That means that experts use medical tests and questionnaires to gauge how much of a risk clients pose. But Absa say that their new algorithm, called “Affinity,” can predict client risk just as well as an underwriter can. How? Well, Absa are keeping their methods a secret, but they have let slip that certain things such as your ability to bank a pay cheque every month (meaning you're healthy enough to work) can predict how likely you are to claim on your life insurance.
There are exclusions though. In order to qualify for a new pre-approved life insurance policy you must not have made claims on another policy, can't suffer from a dread disease (AIDS, cancer, stroke, heart attack, diabetes), can't be HIV positive, and you must be a client of Absa Bank. If you don't meet any of those conditions, then you'll need to go about getting your life insurance in a more traditional manner.
What it Means for You
All this boils down to the fact that getting life insurance in the future could be far easier than it is now. Getting a great policy without needing to fill in forms or go to a doctor's office is definitely convenient. However, it does remain to be seen exactly how accurate Absa's new risk assessment method is.
One concern with all this, of course, has to be privacy. Obviously, Absa's algorithm is based on all kinds of information that the company is holding about its consumers, including what you buy, where you are, and how much money you're making. For some people, this will be an issue. Do we want banks to hold this kind of information? Do we want them to be able to use it? And how safe are their data security systems? Could hackers get their hands on this sort of information? However, these are concerns that are shared in many other areas, including how you use your personal computer and mobile phone, since many companies collect data about their customers. Whilst customers might not be comfortable with this data being used, the truth is that there are many other companies also using your data.
Worries aside, at the very least Absa's new method is going to save a certain group of customers a lot of time and hassle, and for many of us, that's a great thing!
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Main subject: life insurance
