Insurance Journal
The insurance industry is paying increasing attention to what people and businesses post on social networking sites like Facebook, Twitter and LinkedIn.
Already, scouring Facebook and other social network pages of the insureds is a common practice on the claims side of the business. Many investigators say it’s one of the first things they do when looking into potentially fraudulent claims, including both hard fraud (staging auto accidents, etc.) and soft fraud. (over-reporting damaged values after a fire, etc.)
But in a few years, automatically mined data from social networking sites could find their way into the underwriting pricing process. It could become a factor in determining premiums for both personal and business insurance, according to a new report from Boston-based research firm Celent. The report, titled “Using Social Data in Claims and Underwriting,” was published on Oct. 10.
Right now, most insurers are using social medium for sales and advertising, Michael Fitzgerald, Celent senior analyst and co-author of the report, told Insurance Journal. “Some are using it in claims. Underwriting is next.”
State regulators have not yet offered official guidelines in terms of overall use of social data. And such data are not yet approved for use in the pricing process, Fitzgerald added. But that could soon change.
As users interact with multiple social networking sites, purchase items online, and communicate with others in public forums, they leave behind data about their preferences, lifestyle, operations and habits, according to the Celent report. This data can be used to develop a risk profile for an individual or for a company. On the corporate side, companies postings also include descriptions of new product offerings (hence new added risks), services and operations.
Such a profile can be used to build a real-time risk profile that can be integrated into an insurer’s existing process and automation environment. They can be compared to any previous risk information about that entity to identify material changes that should be addressed from an underwriting perspective. The data can also be used to develop conclusions as to the attractiveness of a risk at renewal or at policy lapse.
Already, scouring Facebook and other social network pages of the insureds is a common practice on the claims side of the business. Many investigators say it’s one of the first things they do when looking into potentially fraudulent claims, including both hard fraud (staging auto accidents, etc.) and soft fraud. (over-reporting damaged values after a fire, etc.)
Crack the Data
Currently, social network data are being used as sources of evidence in courts of law in claims cases. Individual underwriters are retrieving risk evaluation information on their insureds through manual searches on social sites.But in a few years, automatically mined data from social networking sites could find their way into the underwriting pricing process. It could become a factor in determining premiums for both personal and business insurance, according to a new report from Boston-based research firm Celent. The report, titled “Using Social Data in Claims and Underwriting,” was published on Oct. 10.
Right now, most insurers are using social medium for sales and advertising, Michael Fitzgerald, Celent senior analyst and co-author of the report, told Insurance Journal. “Some are using it in claims. Underwriting is next.”
State regulators have not yet offered official guidelines in terms of overall use of social data. And such data are not yet approved for use in the pricing process, Fitzgerald added. But that could soon change.
Could Offer Similar Insights as Credit Health
“Just as insurers recognize a link between credit health and risk in auto insurance, social data may offer similar insights for insurers who set out to crack the data,” the report stated.As users interact with multiple social networking sites, purchase items online, and communicate with others in public forums, they leave behind data about their preferences, lifestyle, operations and habits, according to the Celent report. This data can be used to develop a risk profile for an individual or for a company. On the corporate side, companies postings also include descriptions of new product offerings (hence new added risks), services and operations.
Connections and Links
Another piece of useful information is the “social graph,” which shows how individuals or companies are linked together: a picture of who is friends with whom, who follows whom, and what friends of friends people have. In addition to identifying fraud organizations, these graphs can give insurers further insight into how an individual may perform as a risk, based on the behavior of those he or she is connected to.Such a profile can be used to build a real-time risk profile that can be integrated into an insurer’s existing process and automation environment. They can be compared to any previous risk information about that entity to identify material changes that should be addressed from an underwriting perspective. The data can also be used to develop conclusions as to the attractiveness of a risk at renewal or at policy lapse.
Posts
