The mining of social media and the use of big data by insurers to analyse consumer behaviour will change the face of insurance, said Patrick Bracher, a director at Norton Rose Fulbright speaking in an interview with CNBCAfrica.
According to Bracher, insurance companies have already begun looking online to determine whether they have accurately priced their insured risks – including an analysis of the posts you have liked, photos you have shared and even your word choice.
He noted that it was already easy for insurance companies to prove when you were using your cellphone while driving and that the next logical step would be to determine your genetic disposition to certain diseases, your lifestyle choices as well as whether or not you are a risk-taker.
Because your insurer sets your premiums, it’s also possible for them to look at more esoteric data like how you write and your choice of words to held assess risk, said Bracher.
“The information that is posted and an individual’s “likes” can help assess personality traits,” said Bracher.
“It is claimed that people who use superlatives like “always” or “never” imply overconfidence and are bad driving risks.”
“What you like and don’t like, how you write and how many exclamation marks you use could be used against you in assessing your motor premium. It is possible by mining big data to find out all sorts of information about what people eat, what they do, how they drive and what they buy from the pharmacy.”
Is it legal?
While Bracher couldn’t comment on the extent that South African insurers were using your online information, he highlighted that there had already been several cases in the UK where insurance providers had used information gathered online to help determine risk.
He noted that South Africa’s Equality Act does not label discrimination as unfair if it is based on objectively determinable criteria intrinsic to the activity concerned.
With that in mind, South Africa’s courts are going to have to make a decision on whether discrimination between policyholders on prohibited grounds (such as disability or health status) based on the analysis of social media and big data is based on evidence intrinsic to the activity of insurance, he said.
“Likes and dislikes is the stuff of discrimination, so we need to find ways of balancing the ways that we deal with other people, not the least in the world of insurance.”