Big data and insurance

Big data will transform insurance. We will see new products and new services developed as a result of big data. And we'll each in our own way experience its influence on our premiums, cover and claims. And big data has the potential to transform the relationship between the insurance sector and the public.

Many of the ways in which insurance will be transformed by big data have still to emerge. This report, which takes the form of a conversation between an insurance practitioner and a customer, illustrates there are a number of important questions to be resolved, some of which deal with quite fundamental issues.

Two issues in particular are in need of careful professional judgement, both within individual firms and across the sector as a whole: social sorting and the discrimination that could flow from it; and how the right balance between personalisation and pooling of risk is to be achieved. Both of these issues lie at the very heart of insurance, and insurance professionals will need to draw on all their knowledge and experience to ensure their satisfactory resolution.

There will have been few times in the CII's long history when the sector has experienced a transformation of such vital importance. If that transformation is to be successful for both insurance and its customers, then the obligation under which all insurance professionals' work is done must be upheld: "to secure and justify the confidence of the public".

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