Big data in insurance
Author
Markus Christen et al.
Researchers provide recommendations when dealing with Ethical and Legal Big Data Challenges in the Insurance Industry. Those emerge from the NRP 75 project “Between Solidarity and Personalisation – Dealing with Ethical and Legal Big Data Challenges in the Insurance Industry”.
Within 30 months, an interdisciplinary team of researchers from the University of Zurich and the University of Applied Sciences of the Grisons – in collaboration with experts from Swiss Re – investigated the ethical, legal and societal aspects of using Big Data in private insurance. The Consolidation Report “Big Data Ethics Recommendations for the Insurance Industry” provides the condensed results of the research project. Based on their findings, the team formulated recommendations that directly emerge from their research.
Recommendations in detail
- The question if, under what conditions and to what extent insurance companies should be allowed to personalise their insurance contracts based on Big Data analytics should not be resolved indirectly by applying the general principles of data protection and anti-discrimination law.
- The Swiss regulator should continuously monitor and anticipate the use of Big Data for the personalisation of insurance contracts, identify unwanted forms of personalisation, and create specific provisions in insurance law, where needed, to either prohibit personalisation or define the conditions and the extent of permissible personalisation.
- Insurance companies should avoid using data sources that are not related to the insured risk, as this may undermine the customer’s trust in the products and services of the industry.
- Insurance companies should demonstrate to their clients how they protect core values such as privacy, fairness or solidarity from risks posed by Big Data analytics.
- Insurance companies should increase their awareness about the nature and impact of the unwanted discriminatory use of Big Data-based machine learning in prediction, pricing and fraud detection.
- Insurance companies should adapt their general business ethics principles for achieving accountability to the systematic handling of ethical issues resulting from the digitalization of the industry.