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How are big data and AI changing the insurance industry?originally appeared onQuora:the place to gain and share knowledge, empowering people to learn from others and better understand the world.

AnswerbyPeter Colis, CEO and Co-founder atEthos Life, onQuora:

Big data is shaping the next wave of insurtech technology and has already helped us build better products and experiences. However, the insurance industry as a whole is tasked with striking a careful balance between the desire to keep innovating with the need to remain vigilant about how and when consumer data is used. As available data sources multiply, theres a growing conversation around the types of online data providers use to assess an individuals risk. This becomes even more thorny amidst the backdrop of increasingly strict data sharing and privacy regulations.

Its increasingly common for life insurance companies to use non-traditional sources of data such as credit scores, court documents, and motor vehicle records in assessing risk. To keep this practice ethical and avoid becoming invasive, its on insurance industry to find ways to innovate while still putting public good first.

Beyond the public data sources Ive already listed, fitness trackers and wearables are an emerging source of risk data in the insurance world. While sharing your fitness tracker data could benefit some people applying for life insurance policies (as a way to prove physical health), it also poses the risk of creating inaccurate or biased data pools. The nature of an opt-in program could negatively impact those who choose not to participate, incentivizing giving up ones right to keep that data private. Additionally, the data from those who do opt-in may not provide an honest representation of health status. Studies have shown many fitness trackers haveerror rates of 10 to 20 percent.

Finally, social media data is another contentious topic. Using information derived from peoples social media profiles, like publicly accessible Instagram accounts, is a slippery slope when it comes to assessing risk. Its not a consistent source of client data and it can chip away at consumer trust. Ultimately, the data youd glean is likely not even substantive or actionable enough for quality underwriting.

Insurance will continue to evolve into an increasingly data-driven industry. Already, its how we make informed decisions on anything, from marketing to underwriting. But at the end of the day, we can never lose sight of the main objective: protecting families.

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