Three industry insiders give their views on this contentious issue.
Pollyanna Dean, Partner, Simmons & Simmons:
“A huge amount of data is out there but not being used, or not in the way it really needs to be. I say the seeds of the next crisis are being sewn in what data consumers give to the insurers today. Although insurers need this information in order to write the risk, it’s very difficult to get a uniform approach when you consider how much can we take, how much can we use and when do we have to get rid of it?
“There’s also the question of ownership. It’s not a case of if you use the data then it automatically belongs to you.”
Anthony Baldwin, Chief executive officer, AIG UK:
“To a point, big data is interesting in that we have products that allow us to transfer risk out, but what’s more interesting is how we can learn how to improve the overall risk profi le of the consumer.
“Insurers and insurance brokers have great value in data, but we should use that data in a way we can actually help improve the risk profile.
“For us as an organisation, we’re defi nitely shifting that way. Yes, risk transfer products have a role, but it’s risk improvement that has the more significant role.”
Simon Green, Director of general insurance and protection, Financial Conduct Authority (FCA):
“Big data is a buzzword, but we have made a call for input on big data to get a sense of how, where and why information is being used. Then we will consider where we take a market study, with the aim of providing clarity over what big data regulations might be.
“You can more granularly price risk for individuals, or fi nd a more e cient way of pricing and marketing products, with big data. But you can also end up with access problems and social tensions, or with certain age groups and pockets of society that then become uninsurable for various reasons.”