Brokers can take a leaf out of retail book

Brokers can take a leaf out of retail book

Brokers can take a leaf out of retail book

Brokers should take advantage of the consumer data available to them as retailers are doing with customers signed up to loyalty card programmes.

This is the advice of broker champion and Get Informed director Kate Fairley in response to reports that retailers are tracking consumer shopping habits and offering them additional products and services based on the information.

“Retailers are trying to maximise the resources they have available,” she said. “It’s no different to what other businesses do. Brokers have so much data at their disposal. Brokers should look at what retailers are doing with data and how they can benefit from the data they have. This is the way the world is now. It’s scary but brokers cannot afford to be left behind.”

The ICA told Insurance Business that what retailers are doing could ultimately improve the quality of service.

“Any use of technology that complies with Australia’s strict privacy laws – which regulate the collection, disclosure and use of personal information – and can be used to improve the understanding of an individual’s risks and circumstances, might allow a service provider to tailor products and services to that person.”

A spokesman added that decision to accept a product and premium offered by an insurer rests in the hands of the consumer.

Some believe retailers are not clear enough when informing consumers of what they plan to do with the information.

David Leermakers, senior policy officer at Consumer Action Law Centre, said: “The point of loyalty card schemes is to track consumers' purchasing patterns and then use that data for the benefit of the stores running the scheme. Our problem is that this isn't made clear – these schemes are marketed as being for the benefit of consumers. When people are invited to join loyalty programmes it should be far more explicit what is in it for the company.”

Robert Cooper, director of Cooper Professional Risks, said the move was not unethical but privacy laws did not go far enough. He was also unsure of basing premium rates on consumer shopping habits. “If their theories are proved wrong, they are the ones that lose, then their shareholders due to reduced profits. That is the free enterprise system.”

 “I have no doubt that business will always seek to gain an edge on the data they accumulate about their consumers,” he added.

 

In Monday’s newsletter, we speak to a legal expert about retailer tracking tactics.

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