The CII and Cicero have published the Financial Technology (FinTech) Risk Report, to examine the inherent risks in the growth of FinTech and the impact this will have on wider society.
The research identifies that there is a huge opportunity in the application of big data to give insurers more individualised data from which to assess risk. British consumers like risk-based pricing, while the idea that they can cut the cost of their insurance through better behaviour, such as safer driving or adopting a healthier lifestyle, has wide appeal. This also means that those who have inherited medical conditions or have a higher propensity to claim may pay more for cover.
David Thomson, director of policy and public affairs at the CII, said: "The volume of consumer data, or 'big data', has grown exponentially over recent years -- 90% of all the world's data has been created in just the past two years. It has the potential to be immensely valuable to businesses for numerous reasons but it also raises serious questions about the personalisation of risk versus the principle of pooled risk. Insurance professionals have a key role to play in recognising the wider impact on society when applying big data and ensure [that] in the need to embrace the new opportunities, the social value of insurance is not undermined."