Earlier this year, the Canadian Institute of Actuaries (CIA) issued a statement on the growing interest in using big data in insurance ratemaking.
The statement encourages the ethical use of big data in insurance ratemaking. In particular, it was noted that the increasing prevalence of big data in pricing and underwriting within specific insurance markets can be a benefit to society if responsibly used, and that insurance companies’ risk classification systems should be actuarially fair. The CIA further recommended that big-data–derived risk classification factors are not restricted beyond the necessary ethical practices/laws needed to protect consumers.
“We see that society is evolving around us – the emergence of the smartphone and even the ability to capture telematics information is new – and, of course, we’re going to see how we can use these new technologies to give us an advantage,” says Chris Cooney, FCIA and a member of the CIA’s task force on risk classification.
The statement has been featured in news articles and the Institute has begun discussions with several provincial government stakeholders.