Insurance Data Diary

No. 2, August 2022

Insurance data and technology commentary and news from Quotech Founder Guillaume Bonnissent.

Big data gets Canadian approval

For those who were not already aware, a reliable authority has declared that “the use of big data to gain insight serves an important place in the healthy functioning of insurance markets.” That’s according to the Canadian Institute of Actuaries, who made this rather unrevolutionary statement in a policy document published in July.

The CIA’s commentary is pure politics. It has been published in the context of proposed Canadian legislation, the Artificial Intelligence and Data Act, which would limit the use of AI in the context of insurance. It’s relevant for the London insurance market, since the UK authorities are also exploring new rules which would govern the commercial use of AI.

At first glance, we see one major difference: the UK has set out its intentions in a policy document encouragingly titled Establishing a pro-innovation approach to regulating AI. “A regulatory framework that is proportionate, light-touch and forward-looking is essential to keep pace with the speed of developments in these technologies,” wrote Nadine Dorries, the Secretary of State for Digital, Culture, Media and Sport, in her introduction to the paper. “Such an approach will drive innovation by offering businesses the clarity and confidence they need to grow while making sure we boost public trust.”

Insurance gets only a single mention in the UK’s document, where it points out that “the outcomes of the use of AI can have a significant impact on people’s lives – such as insurance…” The authors declare that: “Such high-impact outcomes – and the data points used to reach them – should be justifiable and not arbitrary.”

That sounds absolutely correct; no one in our industry wishes for data to be analysed and deployed in ways which lead to arbitrary outcomes. However, it also highlights the potential for the insurance sector to be singled out as one where “proportionate, light-touch and forward-looking” regulation may be superseded.

The multi-departmental consultation on the regulation is under way, and calls for “stakeholder views” to be submitted by 26 September 2022. It behoves every data user in our sector to speak up.

Farewell B3i

B3i, the industry initiative to deploy blockchain into reinsurance contracts, has fallen into bankruptcy and shut down, despite backing from a score of industry heavyweights ranging from Achmea to Zurich. It’s sad to see the project fail, but not a great surprise.

The simple problem with B3i was its approach. About five years ago, the captains of our sector couldn’t get enough of Blockchain. The distributed ledger technology was going to revolutionise the insurance business, showering money on early adopters (or so the optimists hoped). B3i was launched as a platform to exploit this perceived opportunity.

Unfortunately for B3i and those who poured cash into it, the initiative got things back to front. Technology for the insurance sector must begin with a problem, not a solution. B3i was created to deploy Blockchain, not to meet a specific industry challenge.

At Quotech we are driven by the challenges our customers need to solve. We choose from the entire technological toolkit to build solutions that work by making everyone’s job easier.

Elsewhere in the news…

Some data stories that caught my eye:

Verex Group, the UK telematics supplier, has published a survey which found 81% of young drivers would be willing to share connected data to save them money or get help in an accident. That’s good news for the future flow of data for multiple applications.

In Edition 1 of Insurance Data Diary, I celebrated the adoption of Acord standards for the London market, and noted that for it to work, users from all the market’s niche specialities must contribute. I am therefore heartened that the Data Council has called for such input.

The Pacific Disaster Centre in Hawai’I has won the United Nations’ Sasakawa Award for Disaster Risk Reduction, because it has “made substantive impact in reducing disaster risk”. The honour is granted only every three years, so it’s a huge achievement. The PDC runs DisasterAware, which provides incredible live data about catastrophe events, and is available through Quotech.

“Tapping into the power of data requires a shift in mindset,” according to this article from Digital Insurance, republished in full by InsurTech Insights. It’s worth a read.