The EU want to introduce a ten year ‘right to be forgotten’ into consumer legislation, for adults who have now recovered from cancer. They believe that the access that banks and insurers have to medical records has led to those people being discriminated against. Their choice of words, not mine.
Insurers need to be careful not to see this as ‘legislators do not understand insurance’ or ‘more regulation to hold us back’. The real issues driving this type of legislative proposal are…
- Fairness, both of need and access - people who are cancer free still need insurance, but are having problems accessing it;
- The scope of what insurers see as risk related data – is it any data that insurers might want to check for risk correlations, or something more specific?
- The right to access such data – in particular, should insurers be able to access digital medical records?
Signposting – a Short Shelf Life
UK insurers have gone down the signposting route. If one insurer won’t quote, then they should signpost them towards others who might. Signposting however is largely a sticking plaster, covering up the driving issues outlined in the three bullet points above (more here). This means that UK insurers need to watch how this EU / Insurance Europe tussle turns out, for a) many of them do business in Europe, and b) the outcome will influence UK regulators views on the utility of signposting.
This ‘tussle’ will take time to be resolved, so in the meantime, from a data science perspective, the UK insurer needs to ensure that their underwriting strategy, product design and decision systems have enough flexibility in it to incorporate outcomes like a ‘right to be forgotten’ (RTBF). While I’m certain that there is much more chance of the EU carrying its RTBF argument, than insurers carrying their ‘right to know’ argument, the likely outcome is something like a ‘RTBF mild’.
Not a Strong Enough Case
Insurers are keen on having exemptions to underwriting written into legislation. You can see this in how their trade body Insurance Europe have written their rebuttal to a RTBF. Every point is orientated around what they see as the consumer interest. It does however carry several weaknesses, for example…
- Insurers want to replace scientific, statistical and medical data with expert views, on the basis that the latter is more objective than the former. They’ve forgotten it is experts who compile such data in the first place. This therefore comes across as ‘our experts are good’ and ‘your experts are bad’.
- Insurers want the data that would be lost through a RTBF in order to underwrite accurately and build adequate reserves. This comes across as ‘our data is good’ and ‘your data is bad’. The conflict of interest is pretty stark.
- The ‘uncertainty about claims being paid’ is behind almost all campaigns for access for insurers to more data. The problem with this is that it is a far from sufficient (and rather worn out) counter balance to the growing perception in policymaking circles that insurers aren’t underwriting diseases like cancer fairly.
- The trend in both general and long term underwriting towards ever more granular underwriting will be the main cause of cover (on an individual basis) and policies (on a group basis) no longer being available. This creates a far greater feeling amongst consumers of policies becoming unavailable, than as a consequence of insurers having to comply with a RTBF.
More Structured Thinking Please
Insurers need to be better at weighing up the implications of moves such as a RTBF. At the moment, their communications tend to have too much of a ‘have the cake and eat it too’ feel. What’s needed is a more thought though, structured and forward thinking approach to the issues driving thinks like a RTBF. Those issues are…
- the equality of fairness
- the balance between pooling and personalisation
- the relationship you want to have with consumers
Together, those three things enable an insurer to create a policy and communications strategy that is more likely to be listened to by audiences such as policymakers. That’s because it will have taken the insurer through the hard questions and difficult choices around data, trust and consumers that policymakers are clearly now engaging with themselves. Being listened to is the sort of big win that I think insurers are beginning to struggle with.
Whenever you're ready, there are three ways I can help you:
1. work with you as a critical friend to develop a policy position or communication strategy on issues like fairness, personalisation and consumer trust;
2. provide you with horizon scanning on your current policy position in relation to such issues;
3. help you move beyond data governance and into data ethics.
