Big Data refers to massive databases of information about (millions) of individual consumers, and data mining (rooting around the data looking for any type of pattern)—all packaged into some kind of scoring model. An insurer might use all types of non-insurance databases of personal consumer information for marketing, pricing, and claims settlement.
Insurers have always been in the data collection and data management business, but historically the data collected was limited. In the past decade, insurers started utilizing credit information and data mining, collecting social security numbers and non-insurance data such as web browsing history or online shopping habits, and using new categories of insurance data such as more granular claims data, drones, or telematics. The Center for Economic Justice has advocated for greater consumer disclosure and control over the personal data collected by insurers, for greater security and protection of these personal data by insurers and for meaningful disclosure and redress if the personal data are lost by or stolen from insurers.
Insurer’s use of big data has huge implications for fairness, access, and affordability of insurance. Despite insurers’ claims that algorithms are “objective,” Big Data algorithms can easily reflect and perpetuate historic unfair discrimination. In a 2004 study, the Missouri Department of Insurance found that the single best predictor of the average insurance credit score in a zip code was the size of the minority population in the ZIP code.
The Center for Economic Justice believes that insurers’ use of Big Data holds great opportunities to improve availability and affordability of insurance, to improve transparency in insurance sales and claims settlement, and to promote partnership between consumers and insurers to prevent losses and promote resiliency and sustainability. But such outcomes are not automatic. Without public policy guardrails, insurers will use Big Data in the opposite direction—resulting in less transparency and less accountability to consumers.
Insurer’s use of Big Data poses a huge challenge to state insurance regulation. Big Data and associated algorithms radically increases the market power of insurers, both versus regulators and versus consumers. Regulators face huge challenges in their ability to keep up with changes and protect consumers from unfair practices. CEJ continues to hold insurers accountable for their practices, to improve the available market monitoring tools for insurance regulators, and to increase disclosure of insurer Big Data practices. We aim to stop unfair practices that undermine insurance availability and affordability.
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| 481 downloads | 1.0 | Dana Glass | 2018-06-21 12:24 | ||
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| 397 downloads | 1.0 | Dana Glass | 2018-05-15 12:23 | ||
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| 523 downloads | 1.0 | Dana Glass | 2018-04-06 11:52 | ||
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| 456 downloads | 1.0 | Dana Glass | 2018-03-20 11:53 | ||
| 403 downloads | 1.0 | Dana Glass | 2018-03-07 11:47 | ||
| 402 downloads | 1.0 | Dana Glass | 2018-03-01 12:21 | ||
| 672 downloads | 1.0 | Dana Glass | 2018-03-01 12:18 | ||
| 415 downloads | 1.0 | Dana Glass | 2017-12-03 20:55 | ||
| 448 downloads | 1.0 | Dana Glass | 2017-09-21 20:57 | ||
| 397 downloads | 1.0 | Dana Glass | 2017-09-18 20:58 | ||
| 420 downloads | 1.0 | Dana Glass | 2017-09-10 20:56 | ||
| 396 downloads | 1.0 | Dana Glass | 2017-08-15 21:00 | ||
| 388 downloads | 1.0 | Dana Glass | 2017-08-14 20:59 | ||
| 412 downloads | 1.0 | Dana Glass | 2017-08-08 21:01 | ||
| 420 downloads | 1.0 | Dana Glass | 2017-08-06 20:57 | ||
| 343 downloads | 1.0 | Dana Glass | 2017-05-25 14:36 | ||
| 408 downloads | 1.0 | Dana Glass | 2017-05-24 14:33 | ||
| 404 downloads | 1.0 | Dana Glass | 2017-04-28 14:47 | ||
| 423 downloads | 1.0 | Dana Glass | 2017-04-24 15:04 | ||
| 406 downloads | 1.0 | Dana Glass | 2017-04-08 15:26 | ||
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| 344 downloads | 1.0 | Dana Glass | 2017-03-03 15:13 | ||
| 368 downloads | 1.0 | Dana Glass | 2017-01-05 14:52 | ||
| 366 downloads | 1.0 | Dana Glass | 2016-10-25 15:27 | ||
| 409 downloads | 1.0 | Dana Glass | 2016-10-13 15:30 | ||
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| 421 downloads | 1.0 | Dana Glass | 2016-08-28 14:41 | ||
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| 365 downloads | 1.0 | Dana Glass | 2016-08-08 14:46 | ||
| 413 downloads | 1.0 | Dana Glass | 2016-08-01 15:29 | ||
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| 401 downloads | 1.0 | Dana Glass | 2016-04-03 14:38 | ||
| 454 downloads | 1.0 | Dana Glass | 2016-02-01 15:15 | ||
| 397 downloads | 1.1 | Dana Glass | 2015-12-10 15:33 | ||
| 434 downloads | 1.0 | Dana Glass | 2015-11-01 13:50 | ||
| 370 downloads | 1.0 | Dana Glass | 2015-07-21 13:48 | ||
| 365 downloads | 1.0 | Dana Glass | 2015-07-20 13:54 | ||
| 427 downloads | 1.0 | Dana Glass | 2015-07-03 14:37 | ||
| 474 downloads | 1.0 | Dana Glass | 2015-06-29 15:22 | ||
| 378 downloads | 1.1 | Dana Glass | 2015-05-27 14:51 | ||
| 375 downloads | 1.0 | Dana Glass | 2014-08-16 15:09 | ||
| 356 downloads | 1.0 | Dana Glass | 2012-03-19 15:21 | ||
CEJ Presentation on Ethical Considerations in Insurance 180621 - cej_presentation_naicsummit_ethicalbigdata_180621_slides.pdf