Consent is something the insurance market has often taken for granted. Sure, insurers did the necessary tweaks to accommodate the GDPR, but didn’t really change the fundamentals. Recent developments are now signalling that it’s time for a serious rethink. In today’s post, I look at why sector attitudes to consent need to change, and the four issues which make insurers vulnerable. The last couple of years have seen a progression of cases from which insurers should learn. In 2020, the ABI commissioned independent research into consumer attitudes towards data and insurance. One of the research’s ..read more

The UK insurance sector must prepare for a regulatory revolution. It’s been brewing for some time, but the regulator is now signalling nothing less than a step change in its regulatory approach. Its use of supervisory technologies ( SupTech) is about to move from being a useful tool, to becoming its core way of monitoring for misconduct. The implications for insurers will be profound. The FCA’s much delayed 2021/22 business plan is a curious document. It read less like a business plan and more like a statement of intent. And it was written very clearly with the Treasury, its political mas ..read more

People often think that hyper-personalisation is something that will happen in the future. It’s actually happening now, with a lot of upbeat attention being given to the form it’s taking. Yet it’s also happening in a part of the market that has historically generated the biggest mis-selling scandals associated with insurance. If the sector doesn’t handle this with the right level of critical thinking and challenge, then there’s a danger that history will repeat itself. The form that this hyper-personalisation is taking is called embedded insurance. And it is being talked about as the big devel ..read more

Since 2013, I’ve been urging the insurance sector to think more critically about its enthusiasm for personalisation. Those questions are now being raised more broadly, yet as is common when change happens, the sector has moved on. The emerging view is that hyper-personalisation is now what insurers need to be engaging on. It’s a view that comes with lots of ethical questions attached. Let’s be clear about what hyper-personalisation means, by understanding it in relation to personalisation. Personalisation involves the delivery of insurance products and services orientated less around policyhol ..read more

The road to the digital future of insurance is often referred to as a superhighway. The notion presented is of a safe and fast track heading straight into the future. It’s neat but wrong. The reality for digital strategies is more like a country lane – fast and slow sections, with twists, turns and the occasional dead end. Insurers who designed their digital strategies around that notion of a superhighway now find that they will have a cattle grid to negotiate. In other words, a road that is still open but one which requires them to slow down and handle some noisy feedback. This is the EU’s re ..read more

The future of insurance was the topic of a two day workshop I attended at the University of Bologna last week. The workshop brought together insurance researchers of many backgrounds from around Europe. It is part of a five year EU research project into the changes happening in insurance because of data and analytics. My role was as the discussant to two academic papers that examined in very different ways the issue of fairness in relation to digital insurance. What I’m going to do in today’s post is set out the key points from my discussant speech. I won’t go into the detail of the two paper ..read more

We know that insurers are exposed to a variety of ethical risks. Some come from how the market is structured, while others emerge through changes in market practices. In both cases, they are often big enough and dynamic enough to warrant ongoing attention. But by whom? In today’s post, I’m going to propose the three lines of ethical expertise. The three lines concept is of course familiar to many insurance people through their firm’s three lines of defence approach to compliance. And it’s a nice idea, when it works (more here), but the language feels wrong. Defence? It may work when it comes ..read more

In preparing their plans for 2022, insurers are making a series of fine judgements about the ethical risks that need attention. Given the issues circulating around the sector, the watchwords for this need to be transparency and honesty. Transparency, in terms of “is what we know good enough in scope and depth to get those judgements right?” And honesty, in terms of “are we challenging ourselves enough about what it tells us?" Here are six areas in which those questions need to be asked with particular care. Ethical Decision Making A lot of people focus on the IDD requirement to equip people w ..read more

There is one perspective on fairness that dominates the minds of insurers. It is the fairness of merit, which involves higher risks pay higher premiums and lower risks pay lower premiums. Most of the recent innovations in insurance have focussed on singling out those lower risks, so as to attract them to your portfolio. And every established insurer has a strategy that aims to tackle the associated concept of adverse selection. However, I think a certain amount of group-think has crept into the sector’s thinking on this. And so I want to challenge the primacy given to fairness of merit, drawi ..read more

A recurrent narrative associated with the personalisation trend in insurance is that it will enhance the competitiveness of premiums for consumers. It being taken as a ‘natural given’ – in essence, how could this new way of doing insurance result in anything else? Yet will it? Could it in fact result in less competitive premiums? In fact, when you think about it, personalisation could seriously undermine consumer access to a competitive premium. The influence that personalisation could have on the competitiveness of premiums can be examined on three levels. Let’s call them the signal level, t ..read more