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Research Paper | Information Technology | United States of America | Volume 10 Issue 3, March 2021 | Popularity: 4.7 / 10

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Digital Privacy in P&C Claims Processing: Balancing Innovation with Regulatory Requirements

Sateesh Reddy Adavelli, Ravi Teja Madhala

Abstract: This paper examines the challenges and lessons learned for Property and Casualty (P&C) insurers as they look to balance technological innovation against regulatory compliance, specifically regarding privacy laws. These technologies have been adopted rapidly, from Artificial Intelligence (AI), blockchain, and the Internet of Things (IoT), to transform how claims are processed, resulting in efficiencies, improved fraud detection and increased customer-centeredness. While these advancements have brought much to the table, they hold great fear regarding the data privacy, security, and compliance involved. Insurers need to incorporate privacy-centric frameworks during the development and deployment of new technology to help them navigate these challenges. Our key strategies are adopting the Privacy by Design approach, ensuring compliance-focused innovation via regulatory sandboxes, and constantly monitoring the evolution of privacy regulations. Mitigating privacy risks is possible only when you have effective governance, such as having robust data governance policies and third-party risk management. Additionally, leadership is committed to helping create an environment that is privacy-centric, and providing employee training and transparency in terms of communication with the customer is equally important to sustaining trust. The paper uses a case study of Shift Technology?s AI-based fraud detection system to show how innovation can meet privacy and compliance goals. Finally, the final section concludes with a discussion of emerging privacy risks (cybersecurity threats and algorithmic bias), along with identifying the crucial role of a strong organizational culture in addressing these threats. At the end of the day, this paper emphasizes the importance of adapting privacy-preserving technologies, working with regulators, and monitoring privacy practices to ensure continuous compliance and create innovation in claim processing.

Keywords: Digital Privacy, Claims Processing, Regulatory Compliance, GDPR, CCPA, Data Governance

Edition: Volume 10 Issue 3, March 2021

Pages: 2042 - 2053

DOI: https://www.doi.org/10.21275/SR21032084935

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