FCA avoids full market study but what next for Big Data?
This update considers the FCA's feedback statement on the use of "Big Data" in the retail general insurance sector.
As discussed in RPC's Tech Hub, the FCA has announced in a feedback statement following its Call for Input on Big Data in retail general insurance that it has decided not to launch a full market study into the use of big data in general insurance.
However, while insurance firms may now rest a little easier, the spotlight on big data has not entirely dimmed:
- The European Commission launched its digital single market consultation earlier this year and is expected to follow the FCA in making a call for information on big data before the end of the year;
- The French and German competition authorities have already published a joint paper on potential competition law issues raised by big data and the French competition authority has promised 'a full-blown sector inquiry into data-related markets and strategies';
- The FCA made clear in its feedback statement that it was mindful that the increasing amounts of data from a wider range of sources, alongside sophisticated analytical tools, might lead to the use of reasons other than risk and cost in pricing becoming more prevalent. Therefore to assess how different pricing factors are used, they are planning to look at pricing practices in a limited number of firms in the retail general insurance sector later this year; and,
- The FCA will be co-hosting a roundtable with the ICO later this year on the use of data in retail general insurance.
With all this in mind, firms should take heed of the concerns raised by the FCA in its feedback statement.