Wherever you are, and whatever you are doing, the chances are it’s being recorded somehow. And it’s also probable that that record can be accessed.
That is the nature of a highly-connected world. The internet contains far more information about us than most people realise.
Whether its through business sales records, social media or sensors in the internet of things, almost everything we do contributes to what is known as big data. This is a huge volume of information, that is constantly growing, which could potentially be mined by organisations to assist them, and hopefully the public, in a variety of ways.
Speaking in Cape Town this week, Maria Philippides, a director at Norton Rose Fulbright, said that the insurance industry is one area where the potential use of big data is attracting a lot of interest.
“Imagine what insurers can do with all of this information,” she said. “They could access where you shop, what you buy, what your driving habits are. A life insurer can look at what medication you take and how much exercise you get in order to determine what kind of a death risk you are. A long term insurer who specialises in disability products could even look at your genetic code to see whether you’re at risk of suffering a dread disease.”
Doing this successfully would obviously allow insurers to tailor products to individual clients and their specific risks. To some extent this is already happening with short-term insurers monitoring vehicles and offering rebates for good driving.
What it also does is create the possibility for extremely short-term insurance solutions for specific needs.
“It is possible to have products that are usage-based, on-demand and object-specific,” said Philippides. “For example, if your teenage son wants to go skiing in the Alps, he can take out that insurance on the spot, on his cell phone, pay the premium immediately, and as soon as he’s off the slopes the policy ends.”
In other words, there could be a move away from one-size-fits-all products to offering solutions that actually meet customer needs. The challenge for local insurers would however be how they do this without falling foul of the Equality Act, which does not allow for discrimination on the basis of things like gender, age or pregnancy.
These are issues that could potentially affect the writing of policies, but there is also a lot of information that insurers can, and already are, using when it comes to deciding whether or not to pay out claims. Specifically, this relates to social media.
Only two South African insurers have so far admitted to using social media at the assessment stage, and recently one successfully rejected a car insurance claim on this basis.
“A middle-aged woman had put in a claim for crashing her BMW, which was written off,” Philippides explained. “But one very astute claims clerk looked at this, put her name into Google, and what came up was her teenage son’s Facebook page. There he had posted a photograph of the car with a caption that said: ‘crashed mom’s BMW after a night on the town, but don’t worry friends – it’s insured!’.”
Philippides suggested that some insurers may still be reluctant to use this kind of approach because they are concerned about privacy rights, or contravening laws that prohibit the interception of communication. However, Norton Rose Fulbright is fully of the opinion that using social media when assessing a claim is permissible.
Firstly, this is because most insurance policies require that the insured person has to, at claims stage, provide all proof of what has happened and cooperate in doing so. There is therefore implied consent.
Secondly, information on social media is already in the public domain, unless privacy settings make it otherwise.
“If you’ve already put it out there, already tweeted it, why can’t an insurer have access to it?” Philippides said. “We don’t have to worry about privacy when someone goes out there and says look at this photograph of me.
“In my view, the future for South Africa is that the use of reliable evidence is to be encouraged, as long as it complies with statutory principles and our evidentiary rules, which I think are very fair,” she added.
The obvious implication for the public is that fraudulent claims may be found out this way. But there are broader considerations as well.
Philippides argued that individuals need to think about whether their behaviour on social media could be considered reckless, because that would also constitute grounds for rejecting a claim. If, for example, you announce on Facebook that you are going away on holiday for a month and you give the exact dates you will be away, are you not potentially inviting criminals to use the opportunity to break in to your house?
This is not something that has yet been tested, but it’s possible that an insurer could argue that this constituted reckless behaviour. The message is that people need to be very aware of what they are posting, and who could be seeing it, and always think about the risks.
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