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Whose data is it anyway?

November 13, 2013

My previous blog posts have been focused on how analytics can help drive telematics to the mass market and help identify who is suitable for a telematics policy. In this blog we take a step back to consider the data privacy and security issues around the data that is generated from devices or apps.

The topic of data ethics has been around for a while – this article from 2001 describes the overall challenge. So what has changed?

It’s relatively simple, data at the turn of the new millennium was mainly business generated. We’re now in the world of social and mobile, therefore the explosion of data is led by the consumer and hence there is an increased interest and sensitivity around the use and protection of data. Take a look at this infographic to see where the explosion is coming from:

 

How does this relate to Telematics? It is common knowledge that the device or application generates data in the consumer’s vehicle when the consumer takes a journey. This data is transmitted to the service provider or the insurer for processing. The data is then used for pricing of the consumer’s policy. This all sounds very logical – however, who owns the data at which stage of the lifecycle?

The subject of data privacy and ethics always causes a lot of debate – take this automotive example, a vehicle generates a large amount of data from all the sensors on the car. A manufacturer could now understand what you use and what you don’t use on your car, how you set up certain functions as well as knowing about your trips – but organisations needs to know when to apply the brakes and realize that this can be interpreted as overstepping the mark with regards to ethics.

With regard to the Insurance industry - I believe this is pretty straightforward. Insurers will own the data generated in order to price the policy, but consumers should have the right to access the data (most providers supply a dashboard already) – but then the Insurers should be completely explicit about the extra uses of data including monetising this for mutual benefit.

This could and should be handled through an opt-in clause at the time the policy is taken out – where by the insurer outlines what they may use the data for such as partnering with other organisations to offer additional services to the consumer.

An example of how this has been put into practice in the US where State Farm policyholders have to opt-in in order to receive mileage and trip reports – and every year they need to re-opt-in to receive the data.

So is that the end of the debate? It should be, individuals are now much more open to sharing of generated information and therefore are much more aware of the risks – as Telematics goes mainstream this debate should disappear.