GAO Issues Report on InsurTech
The Government Accountability Office (GAO) has released a report that studied the challenges and risks consumers and insurance regulators face as insurance companies embrace new technologies. The report said new technologies can improve customer experiences and lower costs. However, data collection, regulations, and licensing could pose problems for InsurTech companies.
“Data scientists who develop rating models may not fully understand insurance-specific requirements, such as setting premium rates that are not unfairly discriminatory, and may struggle to measure the impact of new variables used in the models,” the GAO said.
The GAO did not make any recommendations on the topic, but did note that the National Association of Insurance Commissioners (NAIC) and state regulators have taken steps to mitigate the risks. The NAIC's Innovation and Technology Task Force, for instance, will discuss technology in the insurance industry and educate regulators on how technology might affect consumer protection and privacy.
Full Text of GAO Report on InsurTech