Takeaways:
- Most drivers are unaware that data is being collected and shared
- 'Bill of Rights' calls for opt-in to any use, rather than having to opt-out
- AI expected to accelerate sharing of driving data
Insurers accessing driving data from connected vehicles is causing trust issues for consumers, according to a longtime insurtech industry consultant.
Frank Sentner, an advisor to several insurtechs, has proposed an "Insurance Data Bill of Rights," as he discussed in a recent
Vehicle owners are often unaware that lengthy terms and conditions for using connected vehicle systems allow driving data to be shared with insurers, according to Sentner.
"We've got an erosion of trust, where previously the independent agent and the insurtechs, by extension, were trusted partners that we went to, to get protection for the risks in our lives," he said. "If the industry does not get out ahead of this problem, we're going to have people refusing to provide their data. Now we can turn around and refuse to provide an insurance policy for them, but that's certainly not going to help the situation."
Companies such as
"To use your data for other purposes would have to be something that would be explicitly requested, of the originator of the data, of the policyholders themselves," he said. This would have a "ripple effect" empowering drivers and insurers to tell third parties that their contracts with automakers for aggregated data are void because of the lack of consent.
"Furthermore, it should include the right to claw back my data," Sentner added, referring to drivers changing auto insurers. "When I am no longer doing business with you, I can stipulate that you must delete my data."
Insurers ought to work to earn policyholders' trust about sharing private information, before regulators or legislators address the issue, Sentner stated.
Third-party vehicle data collectors are not paying for the true value of the data they get, according to Sentner. "Organizations like LexisNexis and Verisk would not run upwards of 50% profit margins if they had a cost of goods sold," he said. "If you want to be in the data business, then you should be paying for the data that you're collecting." Individual consumers should receive something in return for their data, he added.
Data aggregators stand to become even more profitable by applying AI to extract more value from the collected data, Sentner said.
"I don't think most people understand the uses to which this information can be put and or even that it's being collected and maintained at a level that could have a real impact on their lives," he said. "People are becoming more aware of it. I do believe that AI is shining a big, giant spotlight on it."
