Insurance Companies' Data Strategy

Joy Hyrup Thomsen

Student thesis: Master thesis


The number of insurance fraud cases is increasing every year and since the new GDPR went into effect in 2018, insurance companies fighting fraud must now also take into account GDPR rules. This thesis deals with how an insurance company can prevent insurance fraud, while respecting GDPR and the Charter of Human Rights. If there were no regulations in the data area, the insurers would simply be able to observe and store all the personal data of the customers, so that they could find evidence of fraud more quickly. The new data protection law is based on a regulation designed to protect the fundamental rights of individuals with regard to data protection. However, there are many areas in the Danish law and the regulations that require interpretation and an assessment of each case. Therefore, this thesis assesses, which is basis for treatment some specific personal data has. Next, it will be discussed whether some of the retention deadlines can be extended. Furthermore, it will be considered which penalties an insurance company may incur, if they have not complied with the treatment rules. The law does not always take into account all the consequences a law may have. Therefore, the economic factors are analyzed. One of the factors is the customers' utility from the insurance contract. By assessing this, the company can make some clauses that may cause the customer to change their behavior regarding fraud. Furthermore, this thesis addresses the hidden knowledge that the customer has before they take out insurance, and the hidden action the customer makes after the agreement is concluded. For this, it is calculated what it would cost to disregard the applicable rules to prevent insurance fraud. The final analysis integrates the legal and financial results. By finding a middle way the companies' current data strategy might be improved. The purpose of integrating law and economics is to come up with a scientific proposal on how an insurance company's data strategy can be improved. Some of the customers’ financial behavior problems are discussed and whether it can be worthwhile to negotiate with customers so that their incentive to commit fraud is reduced.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2019
Number of pages82