WIREDGOV

Members interested in being involved are asked to get in touch by Friday 11 December.

On Wednesday 25 November the Financial Conduct Authority (FCA) announced a call for input on the use of Big Data in the retail insurance sector. The FCA is keen to understand how insurance firms are currently using data particularly in decision making and the impact this may be having on consumers. Also to be explored is how insurance firms may be looking to use of big data in the future. The call for input, which closes on 8 January, is focusing on three key areas of interest namely how Big Data affects consumer outcomes, whether Big Data fosters or constrains competition and how the FCA's current regulatory framework could affect the development of Big Data in the insurance sector. The FCA has highlighted its intention to reach out to industry to discuss in more detail these issues and also the possible next steps that may need to be taken following the end of the call for input.

Sue Daley, techUK head of Big Data see the FCA's call for input timely given a recent techUK members event which explored on how insurers are increasingly realising the value of big data:

"The amount of data being created by the insurance industry is likely to increase in the future with the rise of telematics and internet of things enabled devices. With this increased volume of data, and the evolution of data analytics, the opportunity to make data driven decisions in real time is fast becoming a reality for the insurance industry. Decisions that could reduce fraud which is not only a huge challenge within the industry but increases costs for both the insurance provider and policy holder. We look forward to engaging with the FCA as it explores the role of big data in the insurance industry and see the call for input as an opportunity to raise greater awareness of the value big data to the UK finance sector and consider the possible challenges, or barriers, that may be preventing the insurance industry from gaining the full opportunities and benefits from big data today and in the future."

Lisa Moyle, techUK head of financial services and payments reflects on the FCA announcement:

"The Financial Services & Payments Programme has been exploring through our series on insurance the ways in which Big Data is and will continue to transform the sector. There is tremendous potential for change - improved products and services that better meet customer needs, more accurate and 'real –time' risk monitoring, fraud detection and new sources of data that will open up the sector to a wave of innovators.

In amongst all of the opportunity, the issue of ensuring the right regulatory framework has been a consistent theme. Where the use of big data and data analytics enables such a fine tailoring of products and the identification of risk, the notion of pooling risk across large groups of people can be challenged. Access for vulnerable groups to suitable insurance products needs due consideration and care needs to be given to those groups of consumers. Technology may well pose ethical, moral and legal questions that need to be addressed industry wide and in the regulatory framework."

techUK will be looking to engage with the FCA to help inform its thinking and possible future work in this area. Members interested in being involved are asked to get in touch by Friday 11 December.