Earlier this month Chuck Ruzicka and I published Novarica’s report on Operationalizing IoT. Among the topics we address in the report is data privacy and governance.
Fitness app Strava was in the news recently after they published anonymized exercise route data as a set of heat maps that charted runs and bike rides around the world. What Strava didn’t realize was that in more sparsely populated areas, knowing where a number of people are exercising regularly could be an indicator of highly sensitive information — military bases, as it happened, outlined in bright yellow according to the jogging routes frequented by servicemembers.
As IoT takes off, insurers will find themselves handling a lot more data like this — driving routes, stopping points, times spent at home or in the office, and so on. These data are vastly more sensitive and refreshed much more frequently than, say, a home address updated once a year at policy renewal.
Carriers probably won’t feel the need to splash these data on the web to show off their user network, but they should be equally careful about safeguarding their data internally. IoT data can offer new and different kinds of insights to a number of different business functions, so insurers will be incentivized to share this information broadly across the enterprise. They will need to establish well thought-out governance procedures as well as tools (such as data dictionaries) which can enforce business rules about how data is anonymized, accessed, and displayed. Enterprise users can be served aggregated data at data marts, but there is substantial setup work for both business and technology.
In addition, consumers will expect insurers to provide clear indications of what data are collected, how those data are used, and who they are shared with. Broadly speaking, people understand that their data is important, valuable, and personally identifying, but they may still decide to share that data if they feel they’re getting a sufficient benefit. Insurers should be prepared to articulate a clear privacy policy and honor those promises.
IoT offers a lot of exciting opportunities to insurers, but with great opportunities comes great responsibility and great accountability.
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