The Association of British Insurers (ABI) has published a new consumer guide on ‘How Data Makes Insurance Work Better for You’, to communicate to, and reassure customers about how insurers use personal data.
It shows how relevant information can be used fairly to improve products and services, and sets out simply how the law and regulatory requirements protect customer data.
The ABI has identified three key areas how data can make insurance work better:
Firstly, data can be collected and stored more easily than ever before, meaning that insurers can understand consumer preferences better. This means insurers can create products and deliver services which work better for customers, it claims.
Secondly, the ABI said that while insurers have always used data to assess risk, calculations can be increasingly accurate and personal. For example, connected devices in homes such as ‘smart’ boilers and thermostats can monitor a home, give advance warning of potential risks, and actively help customers manage their likelihood of making a claim.
Thirdly, the trade body explained that in circumstances where it is necessary to make a claim, insurers can wholly focus on helping customers and remove administration burdens by collecting data already available. For instance, in the future, following a car accident, a smart device in a car could immediately let the insurer know the location and send a recovery vehicle straight away, as well as information on the repairs needed.
Huw Evans, the ABI’s director general, said: “The data revolution is one of the defining characteristics of our fast-changing world. This new consumer guide demonstrates how seriously insurers and long term savings providers take their responsibilities.”