Big Data and insured’s protection

Abstract

This paper aims to analyze the impact of Big Data on insurance. Digitalization has made possible the processing of huge amounts of data, from a wide range of sources, at very low cost. The exploitation of Big Data presents itself as an opportunity in the insurance industry to mitigate the effects of lack of information on customers. In this regard, the emergence of Insurtech involves changes across the insurance value chain: sales and distribution, pricing and underwriting, as well as claims management and fraud prevention. The analysis of these changes will be approached from the perspective of the insured. Notwithstanding the benefits inherent in the use of intelligent algorithms (e.g., usage-based insurance), the position of an insured in the contract may be weakened by the ignorance of how or for what purpose their data will be used. Thus, the existing or possible legal remedies capable of protecting the insured against intrusions into his privacy or discriminatory treatment will be discussed.