Data privacy day: Proliferation of data in insurance industry and how companies play an active role in shaping customer health

In today's society, digital technologies have become integrated into nearly every aspect of our lives. This increased reliance on technology has brought many benefits, such as convenience, improved efficiency, and access to new opportunities. With so much information being shared and stored online, there is a higher risk of data breaches, and this can lead to sensitive information such as personal identification numbers, financial details etc. misused. This can cause serious harm to individuals and organisations.

The increased reliance on digital technologies has also led to a greater need for cybersecurity experts and digital privacy professionals. Moreover, we have been investing in security measures to protect their customers' data, and our government is developing regulations to protect personal information.

Many individuals and families are underprepared to face financial instability caused by life events. This can lead to a cycle of debt and financial hardship. Data plays a significant role in this, as it can be used to identify patterns and predict potential financial instability. Data analytics can be used to identify individuals or households that are at a higher risk of financial instability based on factors such as income, credit score, and spending patterns. This information can be used to develop targeted financial education and assistance programs to help these individuals and families build their financial resilience. 

Many consumers of life insurance feel under-protected because of low uptake and lack of awareness of term insurance. Term insurance is a type of life insurance that provides coverage for a specific period of time, and is considered to be the most basic and affordable form of life insurance. However, despite its many benefits, many people do not purchase term insurance, either because they are not aware of it or because they do not understand how it works.

Many people do not feel a sense of ownership or responsibility for their own insurance coverage, and as a result, they do not take the initiative to purchase term insurance. This can be attributed to a lack of financial education and a lack of understanding of the importance of life insurance.

The insurance industry is facing a rapidly growing amount of data from various sources, such as policyholder information, claims data, and data from connected devices. This data can be used to improve underwriting, and fraud detection, as well as to create new products and services. Insurance companies can also work with healthcare providers to improve care coordination and reduce healthcare costs. With the use of data analytics and machine learning, insurance companies can also play an active role in shaping customer health.

However, there are also ethical concerns around the use of data in the insurance industry, particularly when it comes to privacy and discrimination. It is important for companies to ensure that they are collecting, storing, and using data in compliance with regulations and that they are transparent about their data practices with policyholders.

There are several new technologies and methods that many companies have started using to protect consumer data, including:

1. Encryption of data in transit and data at rest.

2. Multi-factor authentication technology requires users to provide multiple forms of identification before accessing sensitive data. 

3. Tokenization technology replaces sensitive data with a unique, non-sensitive value called a token. 

4. Identity and Access Management technology is used to manage and control access to data and systems. 

5. Network Micro-Segmentation divides a network into smaller, isolated segments, making it more difficult for unauthorized parties to access sensitive data.

6. AI&ML technologies are used for monitoring and analysing data in real-time, detecting patterns and anomalies, and identifying potential security threats.

7. Blockchain technology provides a secure and tamper-proof way to store and share data.

The article has been written Byju Joseph, , Chief Technology Officer at Future Generali India Life Insurance Company Ltd