What to Expect in Driving Data Regulation
Insurers are putting data to good use. As connected cars, mobile apps and telematics technology produce new streams of data, this information is facilitating improvements in underwriting, claims and customer relationships. There’s just one concern. While people love the faster processing, personalized offerings and deep discounts, they’re also worried about privacy. In a world of constant data breaches, people want to know their information is safe. New regulations are being written to guarantee this safety, and automotive data will be no exception.
The Explosion of Data
Insurers have always relied on data, but it wasn’t until recently that good data became so readily available. It’s also gotten much more personal. Mobile telematics technology is giving insurers a glimpse into people’s driving habits. They couldn’t learn more if they were sitting right there in the passenger seat.
Going forward, the amount and importance of data will continue to grow. According to McKinsey & Company, telematics penetration has reached 20 percent in the U.S., while UBI penetration has reached 6 percent; by 2030, the global value pool could reach $750 billion.
Both insurers and consumers are hungry for the advantages the data revolution promises. But as with every major advancement, new regulations will follow.
Data Privacy Regulations
The National Highway Traffic Safety Administration (NHTSA) warns that concerns over data privacy could slow the adoption of technologies that would improve safety. The NHTSA has been working with the Federal Trade Commission (FTC) to discuss data privacy concerns. According to the NHTSA, “The FTC has authority to bring actions against companies or individuals that engage in unfair or deceptive acts or practices, including those involving vehicle data privacy and security.”
On top of this, new regulations are developing to address the growing issue of consumer data privacy.
- In Europe, the General Data Protection Regulation (GDPR) went into effect in 2018. It established clear rules for how data can be collected and used, with expensive penalties for organizations that don’t comply.
- In the United States, the California Consumer Protection Act creates similar rules. This law will go into effect in 2020. Although California was the first, a handful of other states are considering similar laws. According to the National Law Review, this includes Hawaii, Maryland, Massachusetts, Mississippi and New Mexico.
Staying on the Right Side of Data Privacy
Respecting your customers’ right to data privacy will do more than help you comply with changing regulations. It will also help you earn the trust and loyalty of your customers.
- Be transparent about the data collected and the way it’s used.
- Implement security measures to protect data from malicious attackers.
- Create a response plan in case a data breach occurs.
- Know the relevant regulations where you do business and keep up with new regulations as they pass.
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