Coronavirus will inevitably change many aspects of society. The way that we work, how we live and the way our public institutions prepare for future crises. We are all currently experiencing the changes to how we work and live – as we isolate, the one way we all continue to stay interconnected is through the internet. Connecting with friends and families, purchasing our essentials and attending meetings is all being facilitated using internet data.
I experienced the importance of this data in order to keep business moving at the end of March when I spoke at a virtual Westminster Policy eForum conference event on Data Sharing and digital and online markets – regulation, competition and ensuring consumers and their data are protected. It was a fascinating discussion on the benefits and challenges of smart data sharing for consumers, businesses and governments – all credit to the organisers for moving the conference online in a short time frame.
For some time, AXA has recognised the potential benefits of smart data for improving consumer outcomes and facilitating innovation across the industry. The real value of smart data is derived from responsibly sharing it across wide value-chains where multiple players can be aggregated together in new ecosystems. Moving players away from operating in silos will open new opportunities both in terms of the number and quality of the services that can be provided for consumers.
Take motor insurance claims, in an ecosystem with insurers, vehicle manufacturers, mechanics and breakdown services can all seamlessly feed data into the value chain. From this data, breakdown assistance can be provided more swiftly, information will be more readily available for claims to be processed more efficiently and insurers will have access to higher quality datasets in which to price risk directly associated with driver and vehicle. Moreover, we know that fraudulent claims are still a significant problem across the insurance sector, with 1,300 detected fraudulent claims per day in 2018 pushing up the price of premiums for honest policyholders. By sharing data more widely, organisations such as the Insurance Fraud Bureau and the National Fraud Initiative will have more dynamic datasets to help investigate and identify criminal intents.
A data asset provides an opportunity to create value, but only if that data asset can be protected. It belongs to the consumer and must be controlled responsibly to instil their trust. Ultimately, approaches to smart data need to be fair and inclusive for all consumers, particularly those that are vulnerable. Government has been considering this area in their Smart Data Review, moving beyond existing legislation on data portability to ensure a consistent approach for introducing smart data initiatives into new sectors, tackling common challenges such as consent and liability and supporting the vulnerable and digitally excluded. AXA consider there to be several common challenges, industry and government need to address, including:
- Third Party Providers (TPPs) – Sharing more data across an ecosystem could introduce new sources of leakages, therefore data-sharing needs to be counter-balanced by tougher data protection measures including accrediting TPPs to a standard which provides assurance on capability, integrity and security.
- Consumers that opt-out - Approaches to Open Communications must consider how data sharing will be fair to specific consumers such as vulnerable customers, customers that opt out from sharing their data and those that have a significantly lower data footprint.
- Maintaining competition – Standardised data could reduce the heterogeneity in the insurance market. Products are invariably different from insurer to insurer – an increasingly homogeneous market could exclude consumers, particularly those that may be the most vulnerable.
There are initiatives across the globe that have been utilising data sharing in a responsible way, from which we can take inspiration. For example, Health Level Seven primary (HL7) standards provide a framework for the exchange, integration and sharing of electronic health information. The data portability standards define how information is packaged, communicated and protected, resulting in seamless integration between disparate computer systems, enabling healthcare providers to make better and more efficient decisions for their patients. Insurance and financial services can take HL7 standards as an example of the need for safe and reliable transfers of confidential information between different operating systems and the importance of transparent communications between providers to ensure coordination and consistency.
One lesson we can all share from this difficult period of isolation is the importance of internet data to help us to remain interconnected. When we reach the other side of this pandemic, government and industry should continue to work together to responsibly harness the potential of smart data sharing, enabling consumers to make their data work for them.
