19OCTOBER 2018further biasing against low-to-moderate income consumers or other systemically underserved groups.Example: Hugo provides low-cost, on-demand auto insurance to help drivers keep premiums low by only activating the insurance when they start driving.3. Tech-Enabled Risk- and Claims-Management ToolsInternet-enabled sensors and predictive risk modeling encourage an ongoing shift from reaction to prevention. When disasters occur, these technologies also enable rapid response and claims management. This innovation has led to advances in connected devices and sensors that help prevent adverse events and support individuals in risk mitigation efforts. It also supports insurer and customer aftershocks through faster responses times that minimize loss.Opportunities: A shift to prevention has the capacity to help individuals' live safer, healthier lives and to align insurer incentives with individual interests. It can also lead to extended coverage in higher-risk areas, such as flood-prone land, to better serve at-risk individuals. This technology also has the potential to lead to more efficient and effective claims management.Risks: Insurers may choose to use data to raise premiums rather than to seek risk reduction strategies. Further, any use of sensors or innovative devices would need to come with the promise of sizeable cost savings to increase trust.Example: Understory uses distributed sensors to help insurers determine losses from hail damage. The data allows insurers to more efficiently and better understand the extent and nature of damages.As these trends in insurtech continue to evolve and expand, we encourage the insurance industry to harness the potential opportunity to improve financial resilience, while mitigating the potential risks to individuals. By doing this, insurance companies can innovate to operate successful businesses that offer accessible, high-quality products that support financial health. take care not to allow an increase in competition to result in sacrificing product quality in search of lower prices.Example: SafetyNet, an insurtech venture from CUNA Mutual, uses digital insurance distribution to offer low-cost disability and unemployment insurance directly to low-to-moderate income customers.2. Individualized Policies and Risk AssessmentAdvances in analytics and telematics/telemetry allow both policyholders and insurers more granular control over the risks they cover and the prices of their policies. Through this innovation, customers have a greater ability to only pay for insurance when they need it and insurers have a greater ability to price risk based on individual factors.Opportunities: Advances is this area can allow individuals to lower costs for "good behavior" and help provide feedback to increase preventative behaviors. Additionally, more data and personalized products can assist individuals trying to minimize cost by providing usage-based coverage. Best practices in data use and sharing can help guide this process.Risks: The ability to tailor risk assessments could lead to further limiting options and raising costs for "high risk" individuals by penalizing them for factors like living in lower-income areas. Access to more data will mean insurance markets need to assess new risk factors to avoid Theresa Schmall
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