Big Data & Privacy: unlocking value for consumers

This publication by the Chief Risk Officer Forum, of which SCOR is an active member, discusses the risks and opportunities for the insurance sector linked to the rise of Big Data and the new EU General Data Protection Regulation (GDPR).

Big Data & Analytics allow insurers to (a) better evaluate risks and therefore insure previously uninsurable risks, (b) prevent, rather than financially cover, certain risks and (c) develop more personalized products and services to suit hitherto unmet consumer needs. Such benefits, however, could be hindered by certain new provisions on the processing of personal data introduced by the new EU General Data Protection Regulation (GDPR).
The new regulation appropriately strengthens the rights of data subjects and harmonizes the rulebook, but the emphasis given to concepts like consent as a clear affirmative act, right to object, right to erasure and data minimization can hinder innovation. Just as well, some dangers can be detected in likely market distortions. Non-EU companies that may process non-EU customers’ data will enjoy far greater freedom in analyzing data to devise innovative products and services; these companies would therefore transfer innovation to Europe where local companies compete at a disadvantage.
To mitigate those risks and foster the potential benefits for consumers, cooperation between supervisors and (re)insurance undertakings is key. Data portability should also be made viable through the adoption of good practices and standards on data exchange, so that no market player could lock-in customers by holding their data. Trade associations across the relevant sectors should therefore engage and deliver the requirements of the right to data portability. On the other hand, insurance companies are called to act on internal policies, processes, systems and, above all, their own corporate culture to embed the principles of protection of persons with regard to the processing of their personal data. 
The CRO Forum is a group of professional risk managers from the (re)insurance industry that focuses on developing and promoting industry best practices in risk management. Made up of Chief Risk Officers from large multinational insurance and reinsurance companies, including SCOR, it aims to represent the members' views on key risk management topics, including emerging risks. Since 2016, SCOR has been the leader of the Emerging Risk Initiative work group.
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