Liability for Incorrect Client Personalization in the Distribution of Consumer Insurance

Piotr Tereszkiewicz and Katarzyna Południak-Gierz
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Piotr Tereszkiewicz: Private Law Department, Faculty of Law and Administration, Jagiellonian University, Olszewskiego 2, 31-007 Kraków, Poland
Katarzyna Południak-Gierz: Private Law Department, Faculty of Law and Administration, Jagiellonian University, Olszewskiego 2, 31-007 Kraków, Poland

Risks, 2021, vol. 9, issue 5, 1-15

Abstract: The use of personalization mechanisms should allow the insurance distributor to reduce exploration costs and adjust the offered insurance product to the needs, features, and situation of each individual client. This study seeks to examine how liability should be allocated when the process of the personalization of an insurance product does not result in the client’s choice of an optimal product. First, we identify the typical uses of new technologies allowing for an adjustment of insurance contracts. Second, we analyze the interplay between their application and the legal obligations of insurance product distributors. Subsequently, the paper discusses the scope of factors the insurance distributor is liable for when using personalizing tools in contacts with clients. We submit that offering an online personalization of insurance products ought to be regarded as being equivalent to providing advice under Art. 2, Sec. 1, Point 15 of the European Union Insurance Distribution Directive (IDD). From the consumer’s perspective, our analysis makes the case for the insurance distributor’s liability for mispersonalization of an insurance contract.

Keywords: advice provision; big data; insurance; insurance contracts; insurance distribution; personalization; InsurTech (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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