The insurance industry is increasingly leveraging data monetisation to enhance efficiency, optimise risk assessment, and reduce operational costs. By transforming data into a strategic asset, insurers can unlock new revenue streams and gain a competitive advantage in an evolving marketplace, as digital health technology platform dacadoo explains.
Insurance data is a powerful resource that companies can use to improve services, boost revenue, and differentiate themselves in a competitive market. Insurers can adopt both internal and external monetisation strategies, from refining underwriting models and pricing structures to selling anonymised insights and analytics services.
The key to success lies in leveraging data while maintaining ethical and regulatory compliance.
Traditionally, insurers used data primarily for record-keeping and basic risk assessment. However, forward-thinking companies are now recognising the potential to generate new revenue by strategically analysing and monetising their data.
Those that fail to adopt this approach risk being outpaced by data-driven competitors.
Data as a strategic asset
Historically, insurers have relied on actuarial models to classify risks, determine policy eligibility, and calculate premiums.
These conventional approaches, which often depended on limited datasets such as claims history and demographic information, have now evolved. Leading insurers are using advanced analytics to enhance underwriting accuracy, streamline operations, and drive profitability.
Key data monetisation strategies in health and life insurance
- Dynamic risk assessment and real-time pricing
Many insurers still rely on outdated risk models that fail to consider key lifestyle factors. Advances in risk modelling now enable more accurate underwriting.Platforms like the dacadoo Risk Engine analyse between 4 and 90+ data points to generate over 70 health indicators in seconds, achieving an accuracy rate of 91.6% (ROC-AUC). This facilitates fluidless underwriting, reducing reliance on invasive medical exams and making pricing more dynamic and fair. - Preventative claims management through health data
Claims payouts represent a major expense, with U.S. commercial casualty insurance losses increasing at an annual rate of 11%, reaching $143bn in 2023, according to Swiss RE. Predictive analytics help insurers identify early signs of health risks, allowing them to refine risk models, adjust pricing, and incentivise healthier behaviours through value-based insurance design (VBID). - Lowering risk profiles with digital health engagement
Digital health engagement platforms provide insurers with a more comprehensive view of policyholders’ health. A study in the Netherlands found that implementing such a platform reduced healthcare costs by 4.9% in the first year and 5.3% in the second year. Regular engagement led to fewer doctor visits and earlier mental health interventions, reinforcing the value of digital platforms in improving risk profiles. - External data monetisation in insurance
Insurers are now commercialising their data by offering analytics services, business intelligence tools, and consulting solutions. A prime example is Optum, a subsidiary of UnitedHealth Group, which monetises data by providing predictive analytics solutions to healthcare providers, payers, and life sciences companies. These initiatives demonstrate the potential for insurers to extend their business models beyond traditional underwriting.
Balancing innovation with privacy and ethics
As data monetisation grows, maintaining privacy safeguards is critical. Life and health insurers handle sensitive information, including medical histories and lifestyle behaviours, necessitating strict compliance with regulations such as HIPAA and state insurance laws.
Establishing ethical frameworks that ensure transparency and fairness is essential for responsible data usage.
The future of insurance data monetisation
Emerging technologies will shape the next phase of data monetisation in insurance:
- AI-driven risk assessment: Machine learning models are improving underwriting accuracy and reducing claims costs.
- Blockchain for data security: Decentralised, tamper-proof data storage enhances transparency and fraud prevention.
Harnessing data monetisation with dacadoo
Strategic data monetisation delivers measurable business value while improving policyholder outcomes.
Solutions such as the dacadoo DHEP and Risk Engine enable insurers to optimise their data assets, enhance underwriting processes, and drive new revenue streams while upholding robust privacy and ethical standards.
Read the full blog by dacadoo here.
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