by Summary:
Report says consumers could miss out if insurers deem them too risky Insurance companies are getting excited about the use of big data which new high technology can bring, but it will destroy the concept of pooled risk and many people could become unable to get insurance. More sophisticated use of data could create an “underclass” of people who cannot afford insurance. According to a new report from the Chartered Institute of Insurance, consumers could miss out on some types of cover altogether if insurers deem them too risky. However, the CII paper warns that using data in this way threatens the concept of pooling risk on which the industry was founded. It adds: “Some people may be identified as such high risk to insurers that they are priced out of insurance altogether.
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Report says consumers could miss out if insurers deem them too risky Insurance companies are getting excited about the use of big data which new high technology can bring, but it will destroy the concept of pooled risk and many people could become unable to get insurance. More sophisticated use of data could create an “underclass” of people who cannot afford insurance. According to a new report from the Chartered Institute of Insurance, consumers could miss out on some types of cover altogether if insurers deem them too risky. However, the CII paper warns that using data in this way threatens the concept of pooling risk on which the industry was founded. It adds: “Some people may be identified as such high risk to insurers that they are priced out of insurance altogether.
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Report says consumers could miss out if insurers deem them too risky
Insurance companies are getting excited about the use of big data which new high technology can bring, but it will destroy the concept of pooled risk and many people could become unable to get insurance.
More sophisticated use of data could create an “underclass” of people who cannot afford insurance. According to a new report from the Chartered Institute of Insurance, consumers could miss out on some types of cover altogether if insurers deem them too risky.
However, the CII paper warns that using data in this way threatens the concept of pooling risk on which the industry was founded.
It adds: “Some people may be identified as such high risk to insurers that they are priced out of insurance altogether. Big data could, in effect, create groups of ‘uninsurable’ people. While in some cases this may be to do with modifiable behaviour, like driving style, it could easily be due to factors that people can’t control, such as where they live, age, genetic conditions or health problems.”
It adds: “Some people may be identified as such high risk to insurers that they are priced out of insurance altogether. Big data could, in effect, create groups of ‘uninsurable’ people. While in some cases this may be to do with modifiable behaviour, like driving style, it could easily be due to factors that people can’t control, such as where they live, age, genetic conditions or health problems.”
Financial Times