Data enrichment impact in insurance must be thought about ‘critically’ – FOIL

The use of data enrichment in insurance must be thought about “critically” according to Duncan Minty, founder of Ethics and Insurance.

Speaking at the recent Forum of Insurance Lawyers’ (FOIL) webinar The Ethics in AI in Insurance part two (Artificial Intelligence), Minty questioned: “Why is data enrichment needed in the first place? Why is it incomplete? And from whose perspective is it incomplete?”

He believes that there are significant differences to what consumers believe is complete data  as opposed to what insurers think this is.

“That difference represents the ethical risk that data enrichment introduces into digital strategy. Insurers usually judge that ethical risk through a privacy lens, but when you are assessing the risks associated with data ethics, you need to widen that scope,” he said.

He gave the example of autonomy and secondary use of data – this takes that data being used in one context and uses it to enrich other data in another context, such as a post on social media being used to underwrite a motor policy.

Minty reiterated what Edinburgh University’s Melissa Terras said in 2019: “All data is historical, the product of a time and place; political, economical, technical and social climate – if you are not considering why your data exists and other data doesn’t, you are doing data science wrong.”

Double lens of mistrust

Meanwhile, Minty cited the ABI’s Research in 2020 which found that consumers have a “strong dislike” to their data being used out of context.

The research described this as a “double lens of mistrust” around consumer attitudes to data and insurance.

But some of the ethical risks of data will come from partners and suppliers.

Minty referred to the ICO ruling on consent and secondary use of the UK’s three main data brokers last October which he deemed “pretty damning” as none of consents relied on by Equifax were valid.

He said that rulings like this allude to is “those engaged in data enrichment need to be better at challenging themselves and what they can do with data”.

He also stressed that the culture around data use and acquisition has been “too comfortable”.

Therefore, Minty believes that claims hold the biggest data ethics risks, for example if a claim is based on data that has been enriched without ethical considerations, it is exposed to challenges.

“Enriched data maybe driving decision making forward but it may also be driving it in reputationally dangerous direction. Speed is all well and fine, but when it comes to data ethics, direction is more important,” he added.