Consumers still ‘cautious and sceptical’ over how insurers use data – FOIL

Consumers are still “particularly cautious and sceptical” about how data is used in insurance, perceiving new data initiatives to work in favour of insurers’ interest and not their own.

This was a key finding in 2019’s independent research commissioned by the ABI, which explored attitudes to data in insurance. The report was published in 2020.

Speaking about the research at the Forum of Insurance Lawyers’ (FOIL) webinar, ’The Ethics in AI in Insurance part two (Artificial Intelligence)’, last week, Duncan Minty, founder of Ethics and Insurance, said: “Nearly nine out of 10 consumers were concerned that organisations were selling or sharing their data without permission to do so. And more than half were uncomfortable with this, even though they had given their permission for their data to be shared.”

Minty said these findings have since been backed up in 2021, thanks to similar research from universities and professional services firm Deloitte.

“What we have is a sector driving forward with digital innovation, which is great, but we also have a sector where consumers do not see that innovation to be in their interest and they place little trust in how their data is being used,” he added.

He deemed this a “big problem” because if insurance intends on being successful with innovation, it must close that trust gap.

Although insurers have said, according to Minty, that “consumers should just trust them”, he said this is a “big ask”.

He questioned what success and innovation mean if consumers are not brought along the journey with the insurance industry.

Wish list

Meanwhile, Minty said that his “wish list” for data ethical risks would be credit data, genetic data, conviction data, facial and emotion data and medical data.

“These are data risks that could cause reputational damage and they could also serve as a template in delivering those fundamental changes that insurers are being urged to address,” he stressed.

He cited the recommendations given in the ABI’s research, which included:

• Consent needing to be more specific and informed.
• Pay greater respect to secondary use - do not just take data from one context to be used in another context via algorithms.
• Data trading – tightened controls about how the data is acquired.
• Benefits need to be more specific so consumers understand why data is needed.