Posting pictures of yourself partying on Facebook or bragging about your lazy Sundays could result in a more expensive insurance premium, it has emerged.
Insurers are planning to introduce ‘predictive modelling’ schemes – which monitor online data about people’s social life and spending – in the UK after studying the results of U.S. trials.
While the firms claim the analysis provides valuable information about customer’s health and life expectancy, civil liberties organisations are likely to be concerned about its implication for people’s privacy.
Trials conducted by Deloitte Consulting LLP revealed that the consumer data of 6,000 people was as useful in revealing potential health risks as sending an insurance customer for a blood or urine test.
Richard Verdin, protection director Aviva, said awareness of ‘how much alcohol a customer buys’ or ‘how much they spend a week on petrol’ would be mutually beneficial to firms and applicants.
‘It all comes down to data and what you need to know about the customer to process their claim as quickly and effectively as possible,’ he explained.
‘This allows us to find out what we need to know without asking any questions. It simplifies everything.’
He told the Sunday Times: ‘As well as online data collection we are looking at partnerships with banks, supermarkets, gyms and employers to share data with a view to introducing these methods next year.’
Insurers purchase the data from online market research and data collection companies, who compile huge databases of consumer information from social networking profiles as well as online sales forms, marketing polls and surveys, subscriptions, registrations and public records.
And many consumers could be unwittingly releasing their private date to market research and insurance giants by simply forgetting to click boxes at the bottom of application forms.
While Aviva’s plan to introduce the ‘predictive modelling’ scheme is a new concept, some firms already research applicants’ online behaviour when pricing premiums or investigating claims, according to Craig Beattie, insurance analyst with Celent consulting.
‘In certain high-profile cases where there’s a lot of money at stake, the insurer will look at a person’s online presence,’ he said.
‘Insurance analysts have found common factors within the friendship groups, interests and family backgrounds of people who live beyond 100.
‘If you are selling someone life insurance, it’s very useful to know if they have these indicators and insurers can find it just by looking at the person’s Facebook profile.’
Deloitte, who conducted the trials and have inspired Aviva and Swiss Re to follow similar models, said the online analysis is just a more in-depth take on the type of data already studied by life insurance underwriters.
‘It is easy to establish if a person has gym membership but what’s more important is how often a person actually uses that gym as that can say a lot about their health and lifestyle.’
In response to concerns about the privacy implications of the ‘predictive modelling’ studies, Deloitte, Aviva and Swiss Re all insisted they would not use online third-party data without customer’s permission.
Source : Daily Mail