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A Big Client Concern: Data Protection

Posted By Administration, Tuesday, April 18, 2017

Big data is a big deal in insurance. It’s become critical for underwriting and rating. That’s not lost on the National Association of Insurance Commissioners (NAIC). The NAIC recently formed its Big Data Task force to look at what needs to be done to protect data from an insurer’s perspective to that of the regulator.

Charles Angell who is the deputy commissioner and chief actuary of the Alabama Department of Insurance is on the task force. He recently told the 2017 Ratemaking and Product Management Workshop of the Casualty Actuarial Society that the task force wants a clear understanding of the data insurers are collecting and how that data is being collected. That will lead to knowing how insurers and third-party insurance operations are using what they collect.

Another issue. Making sure the data collected complies with state insurance laws and regulations and is not being misused.

It’s equally important that consumers know their data is being collected and how they can control some of the availability of that data and how it relates to the cost of their insurance. “How can consumers alter their risk characteristics if they don’t even know what data is collected? Should there be some kind of disclosure notice [required]?” Angell said.

Lastly, the task force wants to make sure the data is properly used to determine potential risk. That leads to questions as to whether automation — and the vendors that develop it — should be examined like the insurance advisory groups that develop loss costs.

In other words, the data collection issue is quite complex. And Angell and the task force are leaning toward creating a consulting team to assist state regulators with technical reviews. “This consulting team would not be a regulator. It would not be approving or disapproving any statistical models. It would simply advise [an insurance department] on any issues it found with the way a model is constructed,” he said.

And Angell said this process will also benefit insurers because all technical objections will be raised and dealt with in a central forum rather than in a bunch of different jurisdictions.

Source link: Insurance Journal

Tags:  A Big Client Concern: Data Protection  Cyber Attacks: An Accelerating Crisis & Now the FI  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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