Our world is now awash with data, and nothing seems likely to stem the flow.

To put it in context, the amount of data generated worldwide in 2002 (5 billion gigabytes) is now generated every two days.

And, according to estimates, a staggering 90% of the world’s information was generated in just the past two years.

But Big Data is little use to anyone if it isn’t structured and made accessible to the right people.

Which is why earlier this year the Federal Government asked the Productivity Commission to investigate the impact of increasing the availability of public and private data.

An issues paper was produced and more than 150 submissions received – including an in-depth analysis from the Insurance Council of Australia (ICA).

ICA believes Big Data presents significant opportunities for “all parts of an insurer’s business”, from risk-based pricing and product innovation to consumer engagement and claims management.

“The potential impact of Big Data on insurance pricing is limitless,” its submission says.

“Today, insurers largely use historical data to estimate what might happen in the future. Big Data has the potential to provide fully dynamic pricing by using real-time information about consumer behaviour.”

Giving insurers wider access to certain public sector data would bring major benefits, ICA says.

The industry is a heavy user of natural hazards data, and open access “should be a high priority”.

Backed by submissions from the Australian Business Roundtable for Disaster Resilience & Safer Communities and insurer IAG, ICA calls for a national platform for natural hazards data, to improve consistency across the country.

ICA says there is also a lack of information about rebuilding standards, which can lead to underinsurance in the event of catastrophes.

“For example, where bushfire is a prevalent hazard, the local council may introduce new standards on specific land parcels (when building or rebuilding). This information is neither consolidated by local government bodies nor presented in a uniform fashion.

“[ICA] submits that consideration should be given to how local building standards can be centralised and made more accessible to insurers and the general public.”

Mental health data would help insurers improve coverage to a vulnerable section of society.

Travel insurance, while widely available to those with mental health issues, typically does not cover losses directly related to the condition.

“General insurance policies are risk-based products, and insurers’ access to sophisticated data is critical to their ability to assess and price risk that is specific to an individual,” ICA says.

There is a large amount of public data on mental health, but there are no neat data sets, the classification of conditions differs, and the data sets are not available over long periods.

“To create the right conditions for improved access to general insurance for those with a mental illness, more granular data is essential.”

While ICA wants greater access to public data, it is far more cautious about allowing access to insurers’ data.

“Underwriting data is a commercial asset for insurers, and it is also the basis on which insurers compete against each other. Increasing public access to this data will have an impact on incentives to invest in research and data analysis capabilities, which will in turn have adverse consumer outcomes.”

ICA also takes a stand against insurers being pressured to provide data to price comparison websites.

It accepts that comparing products using product disclosure statements can be difficult, but is concerned that comparison websites focus on price rather than other key aspects of policies, such as terms and cover arrangements.

The independent Effective Disclosure Taskforce, established by ICA, recommended the industry conduct its own review of comparability options, and avoid changes “that would drive consumer switching behaviour based purely on price”.

“This recommendation was endorsed by ICA’s board, and this work stream will commence [next year],” the submission says.

“ICA is not supportive of any regulatory mandate for insurers to provide data to [price comparison websites].

“Any facilitated development of [price comparison websites] through explicit government intervention would represent a form of “infant industry” protection not afforded to other forms of intermediation.”

To an outsider, it may appear the insurance industry wants to have its cake and eat it too.

It wants much wider access to public data, but at the same time is reluctant to share its own.

However, there may be excellent reasons for this approach.

There is an ocean of data out there, but careful thought is required before it is unleashed, or we risk doing more harm than good.