Insurance industry warned of threat posed by fake data

The majority of insurers around the world are failing to ensure the data that feeds their artificial intelligence (AI) systems is accurate, potentially undermining their business decisions.


Wednesday 25

Insurance industry warned of threat posed by fake data

After surveying more than 6,300 and IT executives across 25 countries, consultancy firm Accenture found that just a quarter of insurers are validating their data to some extent.


This is despite four-fifths believing their organisations must innovate at a more rapid pace to maintain a competitive edge, with insurers increasingly threatened by technological disruption.


“Data has always been the lifeblood of the insurance industry, helping carriers make better pricing, risk and operational decisions,” Accenture managing director, Michael Costonis, said. “But insurers must carefully consider how they verify, protect and use this data.


“The benefits of accurate, real-time data to consumers could be tremendous – incentivising customers to reduce their exposure to risks and helping them avoid incurring losses in the first place.”


The survey found that one-third of insurers have been the target of practices such as bot fraud, spoofed sensor data or falsified location data, while another third think they have probably experienced such an attack but are not sure.


Accenture said the importance of validating data could be a key feature to the next wave of industry disruption, with technological change set to “rewrite the rules” over the next decade.


Another may be how effectively insurers ‘raise’ AI systems to act responsibly, with the technology predicted to increasingly take crucial business decisions autonomously.


This is thought to be particularly important after it was found that more than three-quarters of insurance executives acknowledge that AI is advancing faster than the pace at which their organisation is adopting the technology.


Accenture said firms should draw on data science and cyber security capabilities to grade the truth within data, and determine how much risk is acceptable based on the implications of automated decisions.


“For all the opportunities data presents, there are real risks if insurers aren’t properly validating their data,” Costonis said.


“Thankfully, there are steps insurers can take now, including building a data intelligent practice to inspire confidence in their data grading capabilities and combat the risks from manipulated data.”


Most popular

  1. Cyber incidents top ranking of business risks in 2020

    An increasing reliance on data and IT systems has seen cyber incidents shoot to the top of the most pressing risks facing businesses worldwide, research by Allianz has uncovered.


    Friday 17

    17 January 2020

  2. Risk managers overwhelmed by new technologies

    The majority of risk managers worldwide cannot adequately assess the threats posed by new technologies, research by Accenture has found.

    10 December 2019

  3. Blockchain to save financial services firms $7bn by 2024

    Financial institutions will save $7bn (£5.43bn) by 2024 thanks to blockchain technology and the automation of customer checks, a market research firm has predicted.

    05 November 2019

White paper

  • Quarterly InsurTech Briefing Q1 2017

    Why InsurTech? A Pressured Insurance Value Chain

    By Andrew Sagon, Andrew Johnston and Matthew Wong

    InsurTech is a burgeoning phenomenon that is modernising the insurance industry. It is disrupting the traditional value chain whereby insurers offer loss protection, and shifting the emphasis to risk mitigation. Incumbents face disintermediation as investors in search of higher yields pour money into insurance-linked instruments in the capital markets. And entrepreneurial businesses are targeting friction costs and inefficiencies within every aspect of the traditional value chain.



  • Insurance big data – float like a butterfly, sting like a bee

    Nimbleness and agility will unlock potential

    By Elinor Friedman, Andrew Harley and Klayton Southwood

    Recent Willis Towers Watson surveys in the U.S. have shown that P&C and life insurers in developed markets are taking seriously the potential of big data and predictive analytics to improve their businesses. Nimbleness and agility, rather than brute force, are likely to be key to realizing that potential.

    Download PDF

  • The new era of insurance analytics

    Driven by technology, toolkits and talent

    By Claudine Modlin and Graham Wright

    Advanced analytics is helping some insurers offer innovative products and solutions. What do insurers need to know about the changing nature of analytics and whether it is worth the investment? Claudine Modlin and Graham Wright discuss technology, toolkits and talent — topics that may help you decide.

    Download PDF

  • How can we manage the dynamic nature of cyber-risk?

    Risk transfer is part of a comprehensive solution

    By Adeola Adele, Patrick Kulesa, Kevin Madigan and Alice Underwood

    Given the dynamic nature of cyber-risk, taking a multidimensional approach that integrates board governance, technology solutions, behavioral change and risk transfer solutions can help reduce risk to a manageable level.

    Whitepaper Form