Data ethics within insurance

The DE project involved an in-depth study into the use of Big Data & Related Technologies (BD&RT) across the insurance value chain, with a particular focus on ethical aspects. A data collection exercise in the form of surveys and complementary interviews was conducted with a range of firms supervised by the Central Bank to identify the existing and intended uses of BD&RT. In addition the DE project sought to identify potential benefits and risks for both consumers and firms associated with the use of BD&RT. 

The key findings across uses, issues and benefits are set out in the below report. 

• In relation to uses,  the research confirms that the use of BD&RT is already present across the insurance value chain and appears set to become more widely utilised over the next few years.  The impact of the use of BD&RT appears to be greater within certain stages of the value chain, e.g. in respect of pricing and underwriting.
• General issues, governance risks and consumer risks were explored as part of this project.  The Central Bank noted firms need to ensure that they implement practices that consistently result in fair outcomes for consumers, enabling them to make choices that are in their best interests; and firms need to ensure that consumers can access timely and customer-focused service, including where a consumer needs, or is best served by, an in person engagement with the firm.
• In relation to benefits, the Central Bank recognises that benefits can accrue to firms, consumers and society and considers it very important that there is an appropriate balancing of interests across these stakeholders. The Central Bank considers that the use of technology by consumers should serve their interests and not be used as an opportunity to take advantage of their behavioural vulnerabilities, or to increase information asymmetries between consumers and firm.