I don’t think that Allstate is a whole lot different than other insurance companies; maybe they are just being more open about it.
Allstate has announced a new company called Arity, who’s job it is to sell your data. Insurance companies have a lot of data and creating more every day. One part of the auto insurance business is something called usage based insurance or UBI. With UBI, the insurance company gives you a little gizmo that plugs into your car. It detects every time you get in your car and will tell the insurance company how long you drove, how fast you drove, whether you hit the brakes hard, etc. So they know that at 7:30 every morning you leave for work, your house is here, you take this road to get to work and your work is there. In addition, they know how fast you drive, whether you switch lanes a lot, etc.
The first reason they collect that data is so that they can price a policy to your driving. If they ask you, you will say that you drive like granny did on her way to church on Sunday, when in fact, granny drives funny cars at Bandimere (for those of you not in Denver, Bandimere is a local drag strip) on Saturday nights.
Since the insurance business is so competitive, Allstate figured out that they could make a little extra coin by selling your data. They will even sell it to their competitors.
What they have not said is exactly what data they are selling, whether it is anonymous or not, etc. Probably they never will say. After all, they want the greatest possible flexibility in selling your data to maximize revenue.
In addition to selling your data to other insurance companies, other businesses might be interested. Telecommunications companies, banks and retailers are just a couple of examples of those potential customers.
The challenge is that every insurance company has this data too. If they all have it and all sell it, who is going to buy it? That could lead to a price war.
Stay tuned for more fun.
Information for this post came from Insurance Networking News