Markerstudy's acquisition of BGL Insurance reminded me of how important ethical due diligence can be when weighing up data ethics risks.
Markerstudy’s acquisition of BGL Insurance reminded me of the importance of ethical due diligence. So why this deal in particular, when there have been so many in the market over the last twelve months?
Well, back in 2020, BGL Insurance announced the “successful launch of new and market-leading counter fraud ‘pre-sale’ technology.” Nothing new in another application fraud system these days, you may think. What caught my eye though was this reference: “The new self-educating system... aims to eradicate fraudulent motor policies ahead of them reaching an insurer’s books.
Implementing a “self-educating algorithm” is a big job. The design, training and testing programme to make sure that such an algorithm meets ethical standards for fairness, discrimination and consent (to name but three) is immense. There’s a lot of decisions, a lot of judgements, involved in all this.
I have no idea how BGL integrated ethics into the design and launch of this self-educating algorithm and I'm sure they worked hard on it. That’s not my point though. My point is that one insurance firm buying another insurance firm should want to find out things like this as part of its due diligence. Given the attention being given to data ethics in the wider tech world, it’s a category of risk that insurers need to be able to take some form of tape measure to, to ensure that it falls within their risk appetite.
Ethical due diligence need not get in the way of acquisition talks. The prospective buyer can request both initial and ongoing ethical risk assessments done on whatever system interests them. What they’re handed is likely to tell a story.