In 2020, the IAIS published an Issues Paper on the Use of Big Data Analytics in Insurance, which explores benefits and risks for consumers resulting from the increasing use of big data analytics by insurers. The Paper acknowledges the significant benefits of advanced data analytics, including improved risk selection and pricing, more personalised and affordable insurance products, increased choices and more efficient servicing for customers. The Paper also cautions that the growing use of complex algorithms and expanding ability of insurers to access more data could create or amplify specific risks that may warrant heightened vigilance from supervisors.
Supervisors are called upon to consider collaborative and proportionate responses to these issues, maintaining a balance between supporting innovation and ensuring fair and responsible deployment of technology across the insurance value chain.