Facebook Privacy Controversy Could Hinder Insurers’ Data Use
With Facebook CEO Mark Zuckerberg answering lawmakers’ questions about privacy violations, insurers are watching closely to see how the outcome affects their ability to use social media tools to prevent fraudulent claims and improve underwriting. Lawmakers could adopt data privacy statutes similar to those established in the European Union that state that data ownership remains with the individual and that private information cannot be sold or reused without permission.
This type of regulation would mean that insurers would be unable to use customer data to recommend and underwrite core products from other lines of business at the point of sale, Mitch Wein, vice president of research and consulting at Novarica, explains that. These regulations also would impact vendors and InsurTech firms. “The bottom line is, we know there are going to be regulations that impact data security and privacy, and there will be reputational damage for insurance company CIOs or other individuals that do not follow them,” he says.