Data and the digital revolution

Data has always been at the heart of the insurance industry, but is now essential to future innovations in the way insurance is priced, claims are processed, and insurers serve their customers. At the same time, data collection and usage practices are under greater scrutiny than ever, and consumers are becoming increasingly conscious, and in some cases, anxious, about what data they’re sharing with whom. The industry risks major reputational damage if data-driven innovations which are dependent on consumers sharing their information begin to outstrip public perceptions of what is and isn’t acceptable.

Against this backdrop, the Association of British Insurers (ABI) commissioned independent research agency BritainThinks to understand where consumers are starting from when they think about the use of their data in relation to insurance, how these attitudes might change in response to future developments in the sector, and what would show customers that the insurance industry is using their data in their best interests. To find out, BritainThinks conducted a three-stage research project comprising scoping focus groups, a series of deliberative workshops, and a quantitative survey of more than 2,000 general insurance customers.

This research identified that:

1. Consumers are approaching this topic through a double-layered lens of mistrust.
2. Consumers are operating with a relatively shallow understanding of how their insurance is priced, and what their insurers know about them.
3. Consumers judge acceptability of new developments in the sector in relation to their data on the basis of four key factors.
4. As they start to learn more, a fundamental tension emerges in consumers’ priorities for the industry in relation to consumer data.
5. On balance, customers are more likely to say that it is important that the industry moves towards accurate pricing than minimises its access to consumer data. However, this view is far from clear-cut across the whole general insurance customer population.