In various industries, it is believed that the use of digital data will help personalize and optimize services. Insurance is one branch experimenting with these promises. Life insurers are developing policies that offer customers digital wellbeing services and track their activity data. The goal is to use these data to improve risk prediction, pricing and management. However, critical voices suggest that these so-called behavioural life insurance policies are problematic as they submit people to surveillance and may exclude people deemed “high risk” from coverage.
M.Soc.Sc. Maiju Tanninen studied the developing of behavioural life insurance products from both insurance providers and customers’ perspectives. She interviewed professionals from two Finnish life insurance companies, conducted focus group discussions with policyholders and analysed document data.
With this empirical approach, the study looked beyond speculative accounts of the new technologies’ potential effects. The aim of the research was to analyse real insurance practices to see how the new technologies and markets are being produced.
The study shows that the use of digital data does not automatically personalize or optimize services. Implementing data-driven technologies in insurance is difficult. In the Finnish context, regulation sets strict boundaries for data collection practices, the products are met with suspicion in the market and the use of the technologies entails a plenty of practical issues.
At this stage of product development, Finnish insurers’ main goal is to use the new services to promote healthier lifestyles and closer customer relationships. Policyholders’ experiences of behavioural life insurance products are, however, ambivalent. On the one hand, they find the new products useful and enjoyable. On the other hand, the data-driven technologies do not readily recognize their needs in changing life situations. Life-style interventions that customers experience as helpful in one situation might feel intrusive and annoying in another.Furthermore, policyholders are uncertain of the scope of the data collection and use.
“These issues make the disturbing sides of technological control visible. They push people to think whether their decisions are really their own and whether the new data practices can be trusted”, Maiju Tanninen explains.
Behavioural insurance products can fail to enhance customers’ sense of self-determination and ensure trustworthy data relations. Because of this inability to consider policyholders’ emotions and values in a satisfying way, customers discard the digital wellbeing services easily.
Based on the results, Maiju Tanninen suggests that, in effort to create truly mutually beneficial digital services, lawgivers, industries and researchers should pay more attention to people’s everyday experiences with data-driven technologies and the different emotions and values that are at stake. The focus on commonly shared values would help both in developing better technologies and in supporting socially sustainable futures.
The doctoral dissertation of M.Soc.Sc. Maiju Tanninen in the field of Sociology titled The Data-driven Customer Relationship in Behavioural Life Insurance will be publicly examined in the Faculty of Social Sciences at Tampere University in the auditorium K 103 of the Linna building (Kalevantie 5, Tampere) on Friday 18.11.2022 at 12 o’clock. The Opponent will be Professor Tamar Sharon from Radboud University, The Netherlands. The Custos will be Professor Turo-Kimmo Lehtonen from Tampere University, Faculty of Social Sciences.
The doctoral dissertation is available online.
Photo: Jonne Renvall