Whitepaper: Insurers urged to begin location data debate
The industry needs to come to a consensus quickly as the GDPR deadline nears
Innovation in the insurance market is under threat from the looming implementation of stringent European data protection regulations, unless agreement can be reached as to whether property exposure data, especially location data, is deemed as personal data.
With GDPR set to come into force on 25 May, in a joint white paper published by Insurance Day and risk management company RMS, it warns that the lack of clarity surrounding the treatment of property location data has the potential to set back advances made in analytics.
The white paper, “Balancing Act: Will GDPR stifle innovation in insurance technology and transformational analytics?”, cautions that while the London market has looked to engage on several aspects of the new regulations around sensitive data requiring special consent, there remains no clarity on how location data will be treated.
Christopher Beveridge Associate Director at accountancy and advisory firm Moore Stephens explains: “Under the regulations personal information is classified as data that can identify a person.”
Under GDPR, it is still unclear how property location data used in P&C insurance lines will be interpreted. However, RMS says that the industry needs to come to a consensus quickly, even with an interim position, as the deadline nears. Without a clear consensus, the industry could default to data aggregation, degrading the quality of the data.
“GDPR doesn’t really offer clarity for the insurance industry over location data and whether it counts as personal data, and the industry is just grappling with foundational requirements of GDPR and not much attention has been diverted to getting clarity on classification of location data,” says Farhana Alarakhiya, Vice-President of Products at RMS.
“This would turn the clock back on the progress made on transformational analytics, which really lie at the core of future innovation for the insurance industry. When looking at regulation, healthcare companies turned the question around and rather than reducing or diluting their innovation around data, they proactively agreed what they needed, anticipated future needs and built the structures required. Having a view about what the industry really needs now and going forward, being confident, with a systematic, methodical approach to data really pays dividends.”
Click here to read the whitepaper.