The DUA Act Raises Difficult L&P Underwriting Questions  

How the DUA Bill Will Affect Life Insurers  

The long-awaited Data (Use and Access) Act 2025 (DUA) legislation was passed on 11 June, 2025 and now awaits Royal Assent. We could see it in force before Parliament breaks for summer recess. The DUA act introduces reforms to data protection and e-privacy laws, and also includes a strong emphasis on wider data-related policy initiatives that are focused on facilitating digital identities and securing access to “smart” or “open” data sets.  

The bill proposes limited changes to the UK data protection regime…but it does appear life insurers will be impacted, particularly regarding data subject access requests (DSARs).  

Data Subject Access Requests (DSARs) 

The DUA bill incorporates Information Commissioner’s Office (ICO) guidance into legislation affecting how life insurers handle DSARs, including response times and the scope of searches for personal data. Data controllers (such as life insurers) will need to inform data subjects when legal professional privilege is used to withhold information.  

How I Received a Sizeable Reduction in Premium 

The DUA bill may allow for more flexible use of data, potentially enabling insurers to use data from various sources for underwriting and risk assessment, leading to more personalised policies and premiums. But the bill clarifies that decisions based on automated decision-making must have meaningful human involvement, especially when it comes to special categories of personal data, such as health information. 

The DUA bill may relax some restrictions on the use of personal data, but not the use of special categories of personal data, such as health data for automated decision-making.  

I recently received my motor insurance renewal offer, which included the statement below. I challenged it, as it was clearly an automated underwriting decision, and I quickly received a sizable reduction in premium: 

“We use automated processes to assess applications, which use the Personal Information you have provided, including Sensitive Personal Information and information we receive from third parties as set out in Types of Personal Information collected. We may also validate information you provide against other records we hold about you in our systems and third-party databases. 

Where we make an automated decision using Personal Information which has a legal or substantially similar effect, you have certain rights in relation to that decision. In particular, you have the right to receive meaningful information about the logic involved in relation to the decision, the right to human intervention and the right to obtain an explanation of the decision and challenge it. 

”Is it Time to Hit “Pause” on Digital Underwriting?  

Digital underwriting solutions rely heavily on data seeking to “fit” applicants into predefined, statistically robust criteria, which as we know is not always accurate! 

When greater complexity disclosed in the application ruins the digital criteria fit, human expertise becomes essential. With time and improved data coverage, the scope of the digital criteria will grow, meaning more and more applications will ‘fit’ the digital assessment criteria. But there will always be applications needing human expertise, especially those with more complicated disclosures. Technology will not replace humans, but it will provide efficiency throughout the underwriting and claims processes. 

Careful consideration will be needed when adopting any new technology to ensure it helps insurers accurately assess risk, meets customer expectations, respects their privacy, and delivers meaningful value, rather than adding layers of complexity to existing processes. 

Fully digital approaches will lead to blanket exclusions (where the digital fit criteria are not met), meaning those who need cover are missed or excluded. Questions to consider:  

• Is this socially responsible? 

• Will this mean even higher premiums for those who don’t fit the fully digital criteria? 

• Is there a real danger that the concept of cross subsidies fades away, leaving those who don’t fit the digital criteria facing ever higher premiums, pricing them out of cover? Is this “fair” and/or socially responsible?  

Socially responsible insurance pricing aims to make insurance more affordable and accessible, particularly for vulnerable groups. 

Underwriters play a critical role in the process, not only in risk assessment expertise, but also as “trusted advisers” to the financial adviser community. Here they are responsible for communicating and advising on philosophy, and of course, ensuring equity across the policyholder customer base. 

The impact of AI and machine learning on the sector has been building rapidly, from scanning and optical reading of medical records, to identifying trends in disclosures. This trend will inevitably continue at pace, offering speed and precision.  

The Future 

Digital underwriting is a powerful tool, but it’s just that, a tool. Its value lies in how it’s applied. 

It’s important to ensure the process delivers without bias and does not exclude those with disclosures that don’t ”fit” the criteria – cases requiring human intervention. 

Three questions to consider:  

• Are we in danger of trying to automate too much of the underwriting process? 

• Are there those who are being denied cover through automation? 

• Are there enough human checks in the process to ensure automation is delivering the right outcomes? 

For UK insurers, is automation delivering against Consumer Duty principles? 

• Companies must ensure that the price and value of their products and services are fair for all customers. 

• Firms must act in the best interests of their customers, avoiding any action that could harm them. 

• Organisations must take reasonable steps to prevent harm to customers, even if they are not acting directly. 

• Firms must provide clear and understandable communications 

Want to talk this out? Sapiens can help!