The Financial Conduct Authority is seeking views of how Big Data is affecting, and is likely to affect, consumer outcomes and competition in the retail general insurance sector.
The Authority is also seeking views on whether its regulatory framework affects developments in Big Data or unduly constrains innovation in the interest of consumers, and would like examples and evidence where possible.
Telematics and connected vehicles are widely predicted to have a major influence on the way vehicle insurance is supplied in the future.
The FCA says the use of Big Data is developing across financial services and its focus on general insurance reflects how extensively data is already used in the sector and the significance of the sector for consumers. It wants to understand how the use of data by insurance firms has developed in recent years and how this might change in the near future, saying that the use of Big Data brings both benefits and risks for consumers.
Its key focusses are:
- Does Big Data affect consumer outcomes?
- Does Big Data foster or constrain competition?
- Does the FCA’s regulatory framework affect developments in Big Data in retail GI?
In looking at consumer outcomes, it says it is also interested in how Big Data might affect consumers who may not be able to access standard insurance products, including consumers with disabilities or other vulnerable consumers.
Comments are requested via an online form by 8 January 2016.
The Authority will be meeting with firms, consumer groups, industry bodies and other interested parties, and seeking data from firms to help inform next steps.
It expects to publish the findings in the middle of next year