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Insurers collect data from their customers on a daily basis and for years in order to be able to assess risks. The increasing amount of data offers insurers and their customers numerous opportunities, but insurers are also realizing that big data use leads to social questions.
"Only if the customer, regulator and legislator have sufficient confidence in the correct use of data will insurers be able to future-proof new technologies in their business processes. That is why we think it is very important that the customer can address insurers about the way in which they use data-driven applications," says managing director Richard Weurding.
The use of big data by insurers already led to the green paper 'Grip on data' in 2016, which contains principles for the actions of insurers. Since then, it has always been one of the pillars of the Medium-Term Plan. With a Code of Conduct, the ethical framework (2020) and knowledge meetings, such as the big data debate organized in April 2019, the sector wants to keep a grip on data. Read more about all initiatives on this page.
Ethical framework and tools for implementation
The ethical framework (or the English version) consists of requirements with starting points, with which insurers can work from the central principle of customer trust. Since 1 January 2021, the framework has been part of the Covenant's self-regulation: binding on all members. The first audits of this by the independent Foundation for the Assessment of Insurers (Stv) will take place in 2023.
The ethical framework helps insurers carefully determine which artificial intelligence (AI) and other data-driven products and processes they want to apply and why. It may be that a certain data technique is legally permitted, but is contrary to the starting point(s) of the framework. The insurer will then not apply such a technique. It is about making conscious decisions about the use of data techniques.
"Compare risks of new techniques with existing ones, think in advance about the explanation to customers, monitor the consequences and do all this with a diverse team. This way you keep a grip on the use of data-driven applications," explains Richard Weurding.
The framework is partly based on the seven principles for responsible Artificial Intelligence of the High-Level Expert Group on Artficial Intelligence, an advisory body of the European Commission.
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How do others apply the ethical framework?
In 2022, a number of insurers participated in a series on the application of the ethical framework. Let them inspire you:
Toolkit as a non-binding tool
Application of the ethicalframework of the Dutch Association of Insurers does not automatically ensure reliable and ethically responsible data-driven (AI) applications. To do this, you need to give the Ethical Framework a place in the existing organisation. The toolkit of KPMG, partner of the Dutch Association of Insurers, will help you on your way.
As a first step in the toolkit , you make a selection of existing data applications. KPMG has developed two models for this purpose:
- The Classification Model is based on the type of application, such as queries and complex algorithms.
- The Domain Model focuses on the type of service, product or process for which the application is used. For example, the pricing of products and services, the acceptance of new customers and the fight against fraud.
The next step in the process is to test the data application against the 30 standards of the framework. Different key questions are linked to each standard. These can help the insurer to carry out the test (assessment). Where necessary, the Toolkit provides additional information to take into account per standard.
In this way, during the assessment process, it quickly becomes clear what other changes are needed to comply with the Ethical Framework. For example, security measures due to new risks that arise when you use artificial intelligence and machine learning . This advanced technology increases the so-called attack surface: the ways in which criminals use an attack to manipulate the behavior of algorithms.
The Ethical Framework is binding, but use of the toolkit by insurers is non-binding.
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Data protection: code of conduct for insurers
Respect for the privacy of customers is a prerequisite for trust in insurers. The Association has therefore drawn up its own code of conduct that contributes to transparency about data use by insurers. In the code of conduct, the general obligations under the General Data Protection Regulation (GDPR) have been elaborated specifically for insurers. Insurers are obliged to periodically evaluate whether they comply with the code of conduct.
General Data Protection Regulation (GDPR)
The GDPR was introduced in all European member states in May 2018. This European law gives consumers more rights and control over the data they provide to organizations. In addition, organizations must demonstrate that they are in control, which data they process exactly and comply with other new obligations.
The European Data Protection Board has published guidelines with further explanations. The regulators have indicated that they also want to publish the following guidelines:
- Certification (Articles 42 and 43)
- The structure of the European Data Protection Board
- Transparency
- Provision of data to countries outside the EU
Solidarity Monitor
Because more and more large databases and applications are becoming available, insurers can map the high and low risks more and more clearly. As a result, in theory, the extremes can drift further and further apart, so that certain groups of insured persons will no longer be accepted in the future or only at very high premiums. Since 2017, the Association has been carrying out an annual Solidarity Monitor to identify this possible development. Insurers also emphasize that premiums in themselves can vary and that market forces are important and good.