The Financial Conduct Authority has launched another “call for inputs” as it digs into the retail insurance industry and the use of data to drive decisions. Interested participants have until January 8th to submit comments with a feedback statement expected in mid-2016. The FCA notes that use of big data is evolving quite rapidly in other segments of the finance industry. The insurance industry has yet to be broadly disrupted by the internet. The size of the insurance industry (in aggregate) in the UK is enormous at approximately £1.8 trillion and is the largest in Europe. It is very important to the UK economy. Just as peer to peer lenders have disrupted the banking industry, Fintech entrepreneurs have a unique opportunity to disrupt insurance online.
The Call for Inputs will focus on three key topics:
- 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 general insurance?
Christopher Woolard, director of strategy and competition at the FCA, commented on the FCA initiative;
“Big Data is having an ever-growing social and commercial impact, and has the potential to transform practices and products across financial services. We are starting our work on Big Data by seeking to better understand how insurance firms are using data, and how this may evolve in the future. We are keen to talk to both consumers and industry to understand Big Data’s impact on firms’ decisions, and in turn the effects that this is having on consumers. We will then be able to consider what further steps may need to be taken.”