Digitized Insurance: Privacy and Security Challenges

Imagine a world where algorithms calculate risks and act accordingly. Predictive models will know the exact outcomes and suggest optimal actions to take, and all is shared with insurance companies. As the digitization of insurance continues, some crucial security and privacy questions are also raised. Ethics or innovative technology, which comes first?

Interactive, self-optimizing insurance policies that are connected with wearables and smart surroundings, continuously analyzing us and calculating risks; digital-driven insurance in an interconnected smart world will raise questions about surveillance. What does the future of insurance really mean for basic human aspects like privacy, security and solidarity?

Nordic Insurance Company Utilizes ML

One thing is for sure: From social data to location data to purchase data, we’re handing over ever more rich data to our insurance companies. But many of us are mostly unaware of what this data is used for. In addition to privacy concerns, other issues loom: What about insurance companies steering our decision-making process? What about real-time risk scores? Is technology reducing the autonomy of customers all for minimizing risk and damage?

New Challenges and Questions
Technology leads us toward a world of opportunity, but there is a dark side of it. This side is also on the rise because many of the promises of the technology world have developed counter-wise. Several questions are raised:

• Are insurance companies using data to serve customers or just to realize their own goals? What is the leading purpose of the data being collected? 
• Will healthcare insurance companies nudge us in healthy living? What about free will in a world of smart insurtech? 
• Can everyone participate in this new riskless society? Insurance companies cannot use data to focus on the most profitable customers; regulation becomes even more important as technology changes the rules. 
• With increased robotic process automation, concerns arise around the use of algorithms. Who’s responsible for the decisions and actions of these algorithms? Do organizations and customers understand how the choices and decisions of robotic advice are derived? 
• Is it even ethical that an insurance company knows when someone is chronically ill before the person himself knows it? Ultimately, is what we can do with insurance technologically the same as what we want to do?

Machine/human Interaction
We’re moving further into a world where technology controls technology. With this approach, it’s vital for humans to understand the autonomous processes and steps taken by technology. The biggest ethical dilemma of the near insurance future is who will be in control: technology or humans. 

The future of technology in insurance will be about answering ethical questions, enabling transparency and explainability, reducing complexity and adding humanity. Decisions made by technology must be unbiased and the supporting algorithms transparent. The goal should be to create customer experiences facilitated by machines – and intensified by humans.