Let’s talk data privacy. 5 trends we’re seeing.
Trends on the horizon
So, what’s happening to address these issues and how does it impact the insurance industry? Here are five areas where we see trends developing.
1. Privacy laws: More states in the U.S. are enacting privacy laws. As of 2023, five states (California, Virginia, Utah, Connecticut, and Colorado) have enacted their own state privacy laws. As a result, companies and organizations will need to devote significant resources to assess the applicability of these laws and update their compliance programs.
2. Data ethics: The use and storage of data has always been a concern. But with new technology involving biometrics and health-related personal information, there’s more pressure on how that data is stored and how it’s being used.
3. Website tracking: There’s increased scrutiny and regulation of digital marketing practices and the tracking of internet users across websites. Some state privacy laws are focusing in on disclosure and consumer choice regarding their online activities and receiving targeted advertising based on profiling.
4. Children’s online privacy: There’s heightened awareness and regulation around the online privacy of children.
- The California Legislature enacted AB 2273, which requires companies that provide online services, products, or features likely to be accessed by children or teens to increase privacy and safety protocols.
- Epic Games, maker of the wildly popular game, Fortnite, was fined $275 million for violating the Children’s Online Privacy Protection Rule (COPPA). They must also refund $245 million for tricking users into making unintentional purchases. In addition, Epic Games will be required to adopt strong privacy default settings for children and teens.
5. AI regulations: As the insurance industry looks to incorporate more AI into its practices and decision making, federal and state industry regulators will need to provide guidance frameworks to prevent the potential for unfair bias and discrimination.
These are a few examples of the heightened scrutiny of data privacy. As new laws become enacted, it will directly impact the insurance industry if compliance updates or reviews are required.
Indirect impacts such as the potential for increased lawsuits or litigation, are always on the radar when it comes to insurance coverages.