Britain’s markets watchdog has dropped plans for a formal market review of whether Big Data might make it harder or more expensive for some customers to buy car and home insurance, saying there was no evidence of that so far.
Insurers are increasingly using technology to extract value from large sets of data on customers – which can include tracking customers’ use of social media or even driving habits.
So far, the industry is using the data mining techniques in a positive way, to develop new products and cut paperwork, the Financial Conduct Authority (FCA) said on Wednesday following feedback from the industry.
But it said insurers could find ways to differentiate between customers to charge some customers more.
The FCA said it would not launch a market study, as concerns about higher prices were “not yet materialising”. But it said it would look at pricing practices in a “limited number of firms” in general insurance later in the year.
“The FCA will remain alert to the potential exclusion of higher risk customers and will engage with government if concerns begin to develop because of how firms are using Big Data,” it said in a statement.
(Reporting by Carolyn Cohn; Editing by Elaine Hardcastle)
Reuters
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