How insurance companies use customer data

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Posted by Holly West-Robinson on 16 February 2017

The Data Protection Act is a safeguarding legislation that came into force in 1998 to ensure the government, organisations and businesses who have access to your personal information keep those details safe and secure. Whether this be physical or electronic information, there are a strict set of rules/data principles in place that all companies and governing bodies must abide by when handling personal information. Data must be:-

  • used fairly and lawfully
  • used for limited, specifically stated purposes
  • used in a way that is adequate, relevant and not excessive
  • accurate
  • kept for no longer than is absolutely necessary
  • handled according to people’s data protection rights
  • kept safe and secure
  • not transferred outside the European Economic Area without adequate protection

To ensure these principles are stuck to, people handling data put measures in place such as:-

  • Shredding of documents on disposal
  • Encrypted passwords/changing passwords regularly
  • Locking computers when not at their desk
  • Visitors signing in and out if they come to a premises
  • Positioning computers screens away from windows

How do insurance companies use my data?

Insurance companies and brokers rely on your personal information to be able to determine your level of risk and what premium to charge you. They also share your information with other insurers to prevent fraudulent claims, manage risks and reduce losses. Insurers are forbidden to reveal a person’s personal details to an outside party unless it is requested by the police OR unless you have given your consent for another person to deal with the insurance company, and have access to this information on your behalf. 

How companies use telematics data

Not all insurers use telematics or black boxes, but it is becoming an increasingly popular technology for companies to be able to determine risks based on actual driving behaviour. It’s also beneficial for the customer, as driving well sees reductions in premiums, bonus rewards and other incentives all designed to make it more cost effective than a policy that can only understand the risks based on things like location, age, claims history and occupation. Telematics gives us a much better picture of how a customer’s driving style and focuses on the things that should matter most such as their acceleration, cornering, braking and average speed. 

As telematics relies on GPS tracking to allow insurers to be able to view this data, it does mean knowing the location of your vehicle at all times. This then lets us know what the speed limits are on certain roads, layouts and other road structures and how you approach them, enabling the device to give you a score based on your overall journey, which is viewed by you and us via a secure online portal.  

To some, this can appear invasive but the Data Protection Act applies to the handling of telematics data just as it does with anything else. This means we can’t discuss or give away your driving details to anyone other than the police or someone appointed by you to speak on your behalf. Telematics also has its perks in the sense that if your car was ever lost or stolen, we would be able to track its location using the black box, increasing chances of the police being able to find it. 

I want to known what information companies have on me

If you wanted to find out what kind of data and private information an organisation or business has on you, the Data Protection Act means you have every right to do so! By submitting a request to the company or their secretary, they are legally required to give you a copy of this information - but they are able to charge a fee of up to £10 to cover admin costs. The only occasions where they can refuse a request is if the information is regarding the armed forces, judicial or ministerial appointments, tax collection assessments or a crime has been detected or being investigated. 

For more information on the Data Protection Act, including how to make a complaint if you feel your data is being misused in any way – you can contact the Information Commissioners Office who will investigate your claim and take action if required. 

About the Author

Holly West-Robinson
Holly West-Robinson

Hi I'm Holly and I'm a young driver based in Peterborough! I love tattoos, food, drawing and anything art related, enjoy hanging out with friends and family and making a fool of myself XD I'm a huge lover of music and also a part time DJ in the underground drum and bass scene. I passed my driving test first time when I was 17 years old have been loving life and my new found freedom ever since! I'm definitely one of the adventurous types who's always up for a good old road trip!