Whitepaper: Market needs consensus on data dilemma post GDPR
Without clarity and debate firms risk adopting an overly conservative approach
The ability of the re/insurance market to access and use more granular property exposure data to support transformational analytics in the wake of the introduction of GDPR must be discussed, warns a new whitepaper.
The paper “Balancing Act: Will GDPR stifle innovation in insurance technology and transformational analytics?”, is a joint whitepaper published by Insurance Day and risk management company RMS, calling for the market to reach a consensus on the use of property exposure data to ensure P&C (re)insurers do not see any detriment to their analytic capabilities. Many P&C businesses now use more granular property exposure data to gain a differential edge on risk management and pricing.
The whitepaper states there remain fears that when the new EU data protection rules come into force on 25 May, firms will look to redact and aggregate data to ensure compliance, with such a move seeing the industry go into reverse with regards to progressing with analytics.
“The benefits of transformational analytics are already being felt by property re/insurers,” says the paper. “But the 88-page GDPR has been viewed as a potential barrier to the delivery of the true capabilities that big data and analytics can deliver. Waiting for regulator confirmation on specific types of data will take time, so how the industry interprets GDPR in relation to property exposure data could place a handbrake on transformational progress.”
The paper warns that unless a consensus is agreed the market faces a challenge to make the use of the analytics tools at their disposal particularly around the issue of location data.
“Re/insurance is a risk business, but the industry has always had a reputation for being risk adverse,” it explains. “Without clarity and debate on the issues around location data, firms might adopt an overly conservative approach and will simply aggregate data to protect themselves against any potential breach of GDPR, but this will have repercussions for the ability of the London market and particularly reinsurers to assess risk exposures and therefore pricing.”
Click here to read the whitepaper.