Financial Rights Legal Centre has released a landmark report on the concept of Open Insurance – the application of the Consumer Data Right to the general insurance industry.
This is a Financial Rights Legal Centre Media Release
Financial Rights’ Chief Executive Officer Karen Cox said the Open Insurance report by Dr Richard Tooth of Sapere provides vital insights into the risks and opportunities for consumers.
“The implementation of the Consumer Data Right has the potential to provide consumers with many benefits including the ability to access specified data held about them by insurers, and to authorise the secure disclosure of that data to third parties,” Ms Cox said.
“Increased access to and use of consumer’s own data could improve disclosure processes when buying and renewing insurance.
“There is also the potential data can help consumers and insurers work together to produce improved personal and social outcomes in the face of increasing natural hazards borne of climate change.”
However there is the very real possibility that the use of big data could produce serious consumer harms and disadvantages, Ms Cox said.
“More data could lead to granular risk segmentation, and inappropriate price optimisation practices,” Ms Cox said. “Large numbers of people may find themselves unable to access insurance claim on their insurance, or contest their premium increases.”
As with any reforms there can be unintended consequences associated with the process and design of regulation, she said.
“The privacy concerns of consumers must be front and centre of future reforms in the Consumer Data Right and the Privacy Act,” Ms Cox said.
“As the insurance industry begins to use new data collection techniques, artificial intelligence systems and algorithms, we need to ensure that consumers’ personal information is kept safe, secure and not used against them.
“This is why we have taken the initiative to examine Open Insurance at this early stage and made sure we examine it from a consumer’s perspective.
“In doing so, the future of insurance could begin to look more like the promises made in their advertisements and less like the picture painted in the Financial Services Royal Commission”
Report author Dr Richard Tooth of Sapere said: “Open Insurance, and open data more generally, offer a range of opportunities and risks for insurance consumers.”
“Greater access to data could lead to improved and new services in areas such as product comparison and financial management.”
“It is important that Open Insurance reforms — including barriers to innovation such as lack of standardisation of key terms — are carefully considered to maximise the benefits and minimise any downside risks.”
Read the report Open Insurance – the Consumer Data Right and Insurance.
For further information contact Mariana Papadakis email@example.com or 0414729006.