Over the past 15 months, The Floow has been working on UPLIFT, a 21 month project designed to strengthen the UK’s position in the motor insurance sector. The UPLIFT project is being funded by the Industrial Challenge Strategy Fund and is taking place across the UK to understand how to best enhance the insurance industry through telematics and analytics.
UPLIFT aims to empower improved and fairer insurance products to make mobility safer and smarter for all. It achieves this by looking at areas in risk understanding that could contain bias, unfairness or a lack of transparency for end-users to understand and improve any areas that have the potential to be unfair.
Since we started work on the UPLIFT project, we have investigated a number of areas relating to the use of telematics and analytics within insurance propositions to inform risk understanding and policy pricing. We have also undertaken a vast amount of work to understand potential routes for bias. Each of these have then been investigated to ensure maximum fairness and bias removal when using telematics and analytics for insurance purposes.
Evolving Mobility Practices and the UPLIFT Project
The UPLIFT project seeks to deliver innovation in fair and ethical advances in motor insurance using new technology. This is more important than ever as changes to risk are rapidly shifting, due to changing human behaviours and the introduction of new technologies impacting vehicles and insurance products.
These changes are in response to a changing world, and they have accelerated in recent months due to the COVID-19 pandemic and its impacts on mobility including when and where we drive. Our Chief Actuary, Andy Goldby, has been involved in looking at how behaviours have been changing in response to COVID-19 and exploring the impacts which various country-wide lockdowns have had on mobility and risk exposure.
This has prompted faster innovation from across the sector, where the insights from telematics have become even more important. However, all of this raises the questions:
- Are prior estimated risks correct in a changed world?
- What has changed? and;
- And do insurance products remain fair?
What Does This Mean for Risk Estimations and Their Future Evolution?
Fortunately, telematics-based risk understanding, unlike traditional policies, provides ongoing insights into changing behaviour and evolved risks. Given the rapid changes which are currently taking place surrounding mobility, this can help to quickly understand changes in behaviour and their impacts upon risk.
Current changes in market behaviours also have an impact on insurance policies whereby motorists may look to move away from the traditional annual insurance policy to more flexible models such as Pay-As-You-Drive (PAYD) insurance (where you only pay for miles driven) or shorter policy lengths, allowing drivers to switch providers more often in order to obtain a better deal on the cost of their premium more accurately representing shifts in mobility.
Despite these changes, traditional scoring approaches still work and as these new products are introduced, greater monitoring of driver behaviour will become even more vital to create value for policyholders. With more rapid exploration and adoption of new technological approaches, it is also more important than ever to ensure that fair and ethical approaches continue to be embraced.
How UPLIFT’s Work Will Directly Impact the Changing Face of Mobility and Insurance
Ensuring ethics throughout insurance scoring is the main aim of the UPLIFT project whereby new approaches require additional or differentiated processes to ensure the best possible gains for both insurers and policyholders alike. To do this requires not just technical advances but also exploration and incorporation of new emerging standards to ensure responsible innovation.
To ensure that we lead in good practice for responsible innovation as an industry, we have incorporated formal regulations, standards and guidance into innovation activities. These build from ISO standards and guidance such as ISO 26000, covering a number of principles including: accountability for impacts on society, the environment and the economy; transparency in decisions that impact on society and the environment, and; ethical behaviour.
To help manage this we have incorporated new British Standard Institute guidance into our innovation processes following the ‘PAS 440’ standard which launched earlier this year. This standard provides guidance and a base framework to ensure responsible innovation and ensure ethical advances alongside technical change. PAS 440 provides guidance and good practice to ensure strong ethical research supporting societal goals, which is especially needed in times of great evolution to ensure new technology does not re-code old biases.
These new processes now incorporated, developed and strengthened within the UPLIFT research project ensure that The Floow continues to make mobility safer, smarter and fairer for everyone, through the telematics solutions which we provide to insurers and policyholders.
To find out more about our work on this project, visit our UPLIFT page.
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