Does Proactivity Affect Insurance Solidarity and Individual Responsibility?

Over the past 20 years, the insurance industry has been experimenting with technological innovations that deeply affect its business model and social function. The most important one is the use of digital technologies to monitor policyholders’ behaviour and personalise their insurance coverage. In this article, we investigate the potential impact of behavioural insurance on two pivotal principles: insurance solidarity and individual responsibility. We explore the relationship between personalised prediction and prevention in proactive insurance policies based on the use of information extracted from behavioural data. This innovation could bring many benefits in terms of efficiency (improving loss ratio) and foresight (improving risk assessment), but also leads to a renewed focus on individual responsibility for losses. As a consequence, proactivity based on behavioural data could undermine the collective management of future uncertainty, thereby jeopardising the crucial insurance solidarity that makes mutual protection viable.