Privacy concerns are on the rise today. With advancements in technology, people are more aware of how their data is being used and what information they share with others. This challenge goes for the insurance industry as well.
The emergence of insurtech has created challenges for privacy regulation because these new innovations often blur the lines between personal and business data, making it difficult to know where to protect individual privacy.
Concerns about privacy are on the rise
As technology advances, options also increase, and consumers new expectations thanks to advances such as big data solutions associated with the insurance sector. People are increasingly wanting things to be more instant and simple, and insurance companies are looking to adjust and provide new services like on-demand car insurance.
Without proper regulation, these types of services could pose a privacy risk for consumers who would not want their personal data shared with third parties, such as their travel history. Companies like Facebook, Uber, Google Maps, and Amazon have all faced backlash from consumers who feel that their private information is not safe enough online or offline.
According to a recent study by Allianz, "The consequences of data breaches are far-reaching, with more aggressive enforcement, higher fines and regulatory costs, and growing third party liability, followed by litigation."
Where there is a problem, there is also an opportunity
This year, some of the most significant insurtech investments have gone to cyber-focused companies such as Coalition and At-Bay, and in turn, digital insurance. These investments make sense because cyberattacks and the data they target is a growing problem. As these technologies continue to advance, so will their ability to identify new threats and protect against them.
With advancements like IoT (internet of things), insurers such as P&C (property & casualty) are also starting to see how they can take advantage of emerging technologies like artificial intelligence (AI) and machine learning (ML) to provide better services for their customers.
According to the quarterly insurtech briefing by Willis Towers Watson, "Several problems related to the management of digital security and privacy have been generated by rising digitalisation within companies and economies, and this has been a major driver of demand for appropriate cyber-oriented products and services."
In summary, insurance companies should be transparent about how they use their customer data. New technologies are coming out every day, and insurers need to ensure that they do not lose sight of what is essential, including protecting customer privacy while also providing a better service for them moving forward.