To determine your premium. They check if you regularly purchase cheese burgers, cigarettes, alcohol etc.
A SWISS life-settlements firm called Rigi Capital Partners (RCP) recently considered buying the life-insurance policy of an elderly woman apparently suffering from dementia. RCP would take over payment of the policy premiums and receive the full death benefit when she passed away. Her medical records revealed that she had forgotten even her son’s birthday. But Robin Willi, RCP’s owner, searched Facebook to find out more about her. Her profile suggested she had a vibrant social life, not dementia. Reckoning that she was much healthier than she wanted to appear, Mr Willi did not offer to buy her policy.
Medical records can be deceptive, incomplete or expensive to analyse. Mr Willi thinks that publicly available data will be increasingly useful in helping insurers distinguish the aerobics enthusiasts from the couch potatoes. His firm is small enough to be able to search for data manually. For bigger insurers, software is now being developed by technology firms such as Allfinanz and TCP LifeSystems to sift through all the marketing data that might help them identify tomorrow’s cancer patients or accident victims.Such information can be bought from marketing firms that aggregate data about individuals from records of things like prescription-drug and other retail sales, product warranties, consumer surveys, magazine subscriptions and, in some cases, credit-card spending. At least two big American life insurers already waive medical exams for some prospective customers partly because marketing data suggest that they have healthy lifestyles, says Tim Hill of Milliman, a consultancy that advises insurers on data-mining software systems.
Read full story at http://www.economist.com/node/21556263