Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
If You Don’t Understand Bonds, You Don’t Understand Investing - 25th Aug 19
Gold's Next Move - 25th Aug 19
Fresh Water Crisis Unfolding - 25th Aug 19
Newbie Guide to Currency Pairs in Forex Trading – Review - 25th Aug 19
When A 16-Year-Old Earns $3 Million, You Know It's Not A 'Silly Fad' - 24th Aug 19
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Greedy Insurers Are in for a Nasty Surprise – Positioning You for Big Profits

Companies / Insurance Apr 24, 2015 - 08:56 AM GMT

By: Money_Morning

Companies

It’s a great day when a mega-profitable industry that sucks money out of us for services we can’t live without has to change how it lines its pockets.

And that day has come for insurance companies.

We’ve been talking at length about the new economic disruptors that are forcing change in everything from public policy to the financial markets.


And even the powerful insurance carriers aren’t immune.

Thanks to these Disruptors, you can you bring down your cost of health and auto insurance – benefitting the consumer side of your personal ledger.

You can also bolster the investment side of your ledger: Disruptors are upending the insurance industry, meaning you can make money by betting against insurance dinosaurs whose business models are under attack.

Let me show you what I mean…

Flo Knows

In the good old days for insurance companies, auto and health insurers lumped all their customers together. If you were a good driver, you paid virtually the same rates as bad drivers. If you exercised and ate right, you still paid the same health-insurance rates as fast food-eating chain smokers.

The reasoning is simple to explain. Insurance is about pooling risk and the dynamic of imperfect information – meaning that, as long as customers don’t know how to assess what kind of risk they represent to an insurer, they can’t negotiate the price they pay.

Insurers pool good drivers and healthy people with high-risk policyholders so that there will be enough money to pay claims – and still profit handsomely.

In 2014, U.S. insurance companies earned approximately $338 billion in profits.

But that’s all changing.

For a while, insurers have offered better rates based on an insured customer’s good driving record or good health history. Still, history takes time to develop, so rates haven’t come down that much.

That’s because smart devices, smartphones and wearables are changing the information-gathering dynamics and forcing providers to distinguish between low- and high-risk customers.

Auto insurers are already offering discounts and safe-driving rewards based on “dongle” devices an insured motorist can plug into a portal behind the dash of most new cars.

Progressive Corp. (NYSE: PGR) – known for its hugely popular fictional pitchwoman “Flo” (actress Stephanie Courtney) – also advertises Snapshot (a dongle device) in the company’s many TV and radio ads.

According to Autoblog.com, “Progressive uses these devices as part of its Snapshot usage-based insurance program, which has been around since 2008. The dongle, which plugs into the OBD-II diagnostic port, collects data on how many miles are driven, what times of day a vehicle is in operation and how hard a driver brakes. In exchange for this driver data, prudent drivers can receive discounts as large as 30% off their premiums.”

Allstate Corp. (NYSE: ALL) offers its customers Drivewise. According to Compare.com, “Drivewise tracks your driving habits via a mobile app or a small device installed in your car and then sends the data to Allstate. You can look at the data collected on Allstate’s website, so you can analyze your own driving habits to look for problem areas and see how much you’re saving. Allstate says Drivewise will not increase your rates, and could help you save up to 30% on your premiums.”

Check with your auto-insurance provider and see if it has a device that can earn you discounts. If you decide to make that request, be sure to also ask about the cybersecurity on the devices and if the device can be hacked. Someone could remotely take over your car. (And I’m not kidding.)

Unhealthy Health Giants

The health-insurance industry is facing even greater disruptions from new technologies than its auto-insurer counterparts.

As I hinted earlier this week in my column on healthcare Disruptors, wearable devices are changing the landscape in medicine. And that includes changes with insurance costs and practices.

Dr. Benno Keller, head of research and policy development at Zurich Insurance Group Ltd. (OTC ADR: ZURVY), recently said that “this interaction with technology will inevitably generate an enormous of data about the wearer’s choices and lifestyle which insurers can use to refine their understanding of the risks faced by their customers. It would make it easier to predict outcomes and even push solutions to challenges that have yet to occur.”

Insurance giants UnitedHealth Group Inc. (NYSE: UNH), Humana Inc. (NYSE: HUM), Cigna Corp. (NYSE: CIG) and Highmark Inc. are creating programs to integrate wearables into policy pricing and care dynamics.

Companies like energy heavyweight BP PLC (NYSE ADR: BP) are encouraging their global employees to sign up for programs that use wearables to track the number of steps they take, how long they sit and other activity measures to get them healthier so they can lower the cost of insurance they charge them through company-coverage policies.

Time’s Running Out on Insurance Giants

The soon-to-be released Apple Inc. (Nasdaq: AAPL) Apple Watch may single-handedly change the face of insurance.

Some of the things the Apple Watch will track include your heart rate, blood pressure, hydration and blood sugar. It will count your steps, monitor your sleep, measure how much sunlight you get and remind you about your weight. Everything the smartwatch will be able to do, in terms of monitoring your health, can be transmitted to insurance companies and provider servicing databases to better profile what kind of risk you pose to the insurance company.

If you want to save money on your health insurance, you’ll be able to do so – if you don’t mind sharing your personal metrics with your provider.

How much might you be able to save? In due course, a lot.

That’s because there are already startup insurance companies like Oscar“Disruptor” companies – that are attacking the old insurance model to bring down premium costs for policyholders who demonstrate they are low-risk customers.

Late last year, in fact, Fortune described New York-based Oscar as a “hipster health insurance company” and a “web-savvy startup” – just the kind of Disruptor to take on the entrenched giants.

As these disruptions take hold, you are going to be better equipped to improve your own health with wearables.

You are going to be able to negotiate down what you pay in premiums for your insurance.

And, if you stay tuned here, I’ll tell you who the new Disruptors are that will be worth investing in – like the privately held Oscar, when it finally goes public.

And I’ll also spotlight which giant insurers are going to end up being burdened with bad risks, faltering profits and falling share prices.

And some of those could end up as “short” candidates – underscoring the fact that Disruptors create profit opportunities on both sides of a trade.

Source :http://www.wallstreetinsightsandindictments.com/2015/04/greedy-insurers-nasty-surprise-positioning-big-profits/

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules