Bringing Big Data Under Control
Big Data promises to make a huge difference to insurance companies in the context of marketing, underwriting and claims management. Today, capturing, storing and harnessing huge volumes of personal data on clients has become a priority, especially for life carriers. But Big Data also means Big Risk, notably around privacy and usage.
One problem is that data protection regulations vary around the world and Big Data applications that conform internationally, may not in certain local jurisdictions. Equally, consumers are increasingly cautious over privacy and they know their rights.
Breaches of data protection provisions can seriously damage the reputation of a company. Privacy-enhancing technologies (PETs) - technologies designed to protect privacy and the anonymity of personal data - play an important role in helping businesses adhere to data protection requirements.
"Anonymisation" is increasingly difficult to achieve, but by demonstrating that controls are in place, companies can promote their commitment to data protection and improve their image as a result. So the onus is on companies themselves to treat their customers’ data responsibly and show transparency in how they use data.
It remains to be seen how successful reform proposals and international efforts will be in harmonising the large differences in data protection standards around the world, and what impact this will have on the availability of personal data and opportunities for legitimate use, both in general and as part of Big Data, for the insurance industry.
In the end, it will be down to companies to closely manage their Big Data risk if they are to maintain customers’ trust and prevent the supply of this important raw material from drying up.