Big Data and Insurance: Implications for Innovation, Competition and Privacy
June 4, 2021
Advances in big data analytics, artificial intelligence and the Internet of Things promise to fundamentally transform the insurance industry and the role data plays in insurance. New sources of digital data, for example in online media and the Internet of Things, reveal information about behaviours, habits and lifestyles that allows us to assess individual risks much better than before. In many instances, better data makes it possible to better align premiums and risks and to reduce the overall cost of insurance. This has great economic and societal benefits in that it allows premiums to signal risks, reduces the cost of informational asymmetries in insurance markets, and enhances efficiency, thereby boosting insurance protection
