Insurers will face an emerging strategic risk of how to manage and retain control over client data with recommendations that data relating to individuals, even when gathered by an insurer, remain the property of the individual who will provide permission around its use.
While this would meet the recommendations of the Harper Review it would also heavily impact the insurance industry according to Suncorp, Executive General Manager – Strategic Innovation Personal Insurance, Kirsten Dunlop.
Speaking at a recent Swiss Re Roundtable on how technology was reshaping insurance risk, Dunlop said any moves to take data out of the hands of insurers was a strategic risk across all part of an insurance business.
“I would consider it to be one of the most strategic risks for our whole industry that we have traditionally felt it possible to ask for, collect that information, to use it, to assess, to price, to determine outcomes of claims. That asymmetry in our favour has made it possible to do commercial insurance,” Dunlop said.
However, Dunlop added that in the UK consumers can now own their own information, provided to them by insurers in a readable format, and use it as they prefer with the Harper Review suggesting a similar recommendation is adopted in Australia by 2018.
“This is a world where we can ask for information, but we may or may not be able to have it.”
“This is a world where we can ask for information, but we may or may not be able to have it. We now have the possibility where have consumers are increasingly alive to the value of that information, the destiny of that info, the risk we will on-sell it and aggregate it,” Dunlop said.
She also stated that insurers were not prepared for this shift in the consumer relationship where individuals would hold information and insurers would need to request it, either directly or indirectly while providing valid reasons for the request.
“Our business models are not prepared for the design of business where the value proposition is the relationship between big data and small data and where a fourth party management function sits on side of consumer and allowing them to deliberately slow release exactly what they want to release, when they want to release and why they want to release it and negotiate that with you,” Dunlop said.
“It is every single piece of our business would be affected by that and we are totally unprepared for understanding what the implications are at present.”
