As a preferred club for Coaching Actuaries, one of my roles as the Vice President of Public Relations for Gamma Gamma is to create two posts a semester that will be posted on the Coaching Actuaries blog.
While writing about gene therapy I interviewed the Vice President of Business and Actuarial Analytics for Blue Cross Blue Shield Massachusetts on how this life-saving technology is impacting the health insurance industry. After discussing premiums, I learned that although gene therapy has the potential to save insurance companies money in the long run, the 18-24-month forecasting that many companies do does not adequately take this into account. This increases prices for policy holders without balancing the long-term savings that moving away from symptom management treatments and towards cures provides. Annual policy renewals complicate the issue further by causing the need for a short-term outlook, and simply lowering costs will not resolve this.
Currently, I am working on an article related to telematics devices, and the weight auto insurance companies place on individually collected data verses generalized predictive models in order to determine premiums. This technology has the potential to resolve insurance disputes and create a new business model based on customizable insurance rates for individual policy holders, but I want to know how insurance companies have handled the influx of data.