Our latest installment of “The Insurance Interview” features a thought-provoking conversation with Cathy O’Neil. Cathy is a mathematician, independent data science consultant and author of the New York Times best-seller Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy. Cathy joins Faegre Baker Daniels partners Scott Kosnoff and Sara Powell to discuss how big data and algorithms can go astray and what insurers who use them can do to stay out of hot water.
In particular, the interview tackles the following:
- The tension between encouraging innovation and protecting consumers. Insurance regulators want to be supportive of innovation, but they also want to make sure that innovation doesn’t harm consumers or violate existing laws. In particular, regulators are increasingly interested in understanding how insurers are using big data and algorithms.
- The fallibility of algorithms. Algorithms developed with the best of intentions can go astray. There can be problems with the underlying data, the algorithm itself may not function as intended, or it may use factors that are a proxy for race or other characteristics that aren’t supposed to be taken into account.
- Identifying and managing risks associated with big data. Deficiencies in data and algorithms present regulatory, litigation and reputational risk, but can be difficult to detect. Insurers should consider independent testing and validation of their data and algorithms to identify any problems before they come home to roost.
This podcast is part of our series, “The Insurance Interview,” which features insights from insurance industry thought leaders as well as updates on issues facing the industry on the state, federal and international fronts. If there is a topic you’d like FaegreBD to consider for a future podcast, please let us know.
Note: The opinions expressed in this podcast do not necessarily reflect the views of Faegre Baker Daniels.