We've all experienced the increase in cost of goods and services over the past several years, so it's logical to anticipate that your insurance premiums might increase some, too. However, the amount of increased cost has taken some policy holders by surprise. There isn't simply one major reason but a number of factors that have caused insurance premiums to rise. In addition to increasing rates, insurance carriers have also tightened requirements for insurance approval and/or renewal. Just like with increasing premiums, clusters of factors have made it more complicated to identify and predict risk. Technological advancements like machine learning and artificial intelligence have given insurers a more accurate way to predict risk by using huge volumes of data. So what kinds of data are now being used to modify (and tighten) criteria for insurance policy approval? Here are 3 lesser known factors you should be aware of that affect your perceived financial stability by insurers: 1. Asset Verification: Insurers may assess an individual's assets, such as savings, investments, and real estate holdings, to gauge financial stability. High levels of liquid assets and valuable assets can provide a financial cushion and reduce the risk of defaulting on insurance payments.
2. Behavioral Analytics: Insurers may analyze behavioral data, such as spending patterns, transaction history, and online activity, to gain insights into an individual's financial habits and risk behavior. Certain spending patterns or financial behaviors may signal financial instability or an increased risk of default. 3. Predictive Modeling: Insurers use predictive modeling techniques to forecast an individual's future financial behavior and likelihood of defaulting on insurance payments. These models incorporate various data points, including demographic information, credit history, and past insurance claims, to estimate the probability of financial instability. Because of this increasingly challenging and ever-changing market environment, it's essential today for insurance policy holders to work closely with an experienced, independent insurance agent who is aware of the specifics of companies' underwriting criteria. Call me today for help understanding and navigating this complex insurance environment: 706-726-1446. Comments are closed.
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AuthorDennis Lam Archives
February 2024
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