The Financial Conduct Authority (the FCA) has this week announced that it is conducting a review into how insurers analyse and utilise information about consumers. The FCA has published a “call for inputs” seeking views on how so-called “Big Data” is affecting, and is likely to affect in the future, consumer outcomes and competition in the retail general insurance sector.
The FCA defines Big Data as “the use of new or expanded data sets; new technologies to generate, collect and store data; and sophisticated analytical techniques”.
The analysis and processing of large and complex sets of information, often harvested from one’s use of mobile phones and personal computers, could be used beneficially to enhance consumer choice and optimise industry practices. However, there is increasing concern that big data could be used in ways that could have negative social consequences.
The FCA’s director of strategy and competition said that they are keen to “talk to both consumers and industry to understand Big Data’s impact on firms’ decisions, and in turn the effects that this is having on consumers” and “will then be able to consider what further steps may need to be taken”.
The FCA is also interested in whether its regulatory framework affects developments in big data in retail general insurance. It expects to publish a feedback statement detailing the findings from the call for inputs and their next steps in mid-2016.
For further details of how to respond to the call for inputs, which closes on 8 January 2016, see the FCA website1.