Risk and Regulation
Editorial by Rick Huckstep
Making sense of the data; the issue for regulators and the insurance industry
In the entire history of mankind, the contents of every book ever written amounts to around 52TB of data (give or take a TB or two). That sounds a lot until you see that more than ten times that amount of data is produced every single day on social media!
And this data tells you a lot about the people who are generating it.
Insurers are already using tech-based non-traditional sources of data, such as telematics and wearables, to improve their risk ratings on customers. So why not also tap into the explosion of personalised data on social media?
This is the subject that I address in my article for this month’s Risk and Regulation edition of InsurTech Insights. In particular, I look at the InsurTech trend of personalisation of insurance, the growing interest in social media data, and the attitude of the regulator towards it. To help me, I turned to insurance ethics expert, Duncan Minty to help me unpick the issues for insurers and regulators alike.
In the sister article from KPMG, entitled Knowing the risks, Meital Raviv makes the point that, in this time of innovation-driven change, insurers cannot forget their regulatory and compliance responsibilities.
It is not surprising that both of us make similar points about the impact of new techs, such as AI, machine learning, algorithms and big data, on traditional approaches to insurance. And that this new tech could ultimately undermine the risk pooling function of insurance.
Is this the beginning of the end for traditional insurance, or a new dawn? Only time will tell in these interesting times!
Chairman, The Digital Insurer
The personalisation of insurance is one of the great trends of InsurTech, but where do insurers and regulators draw the line on how data should and shouldn’t be used?
KPMG Perspective: Knowing the risks: How to manage regulatory risks while driving innovation forward
The growing ability to distinguish customers at granular levels is shifting the foundation of how insurance services are developed, priced, and offered.