This South African lost out on insurance because of social media – here’s what happened

South African insurers are not currently using social media to build risk profiles and calculate premiums.

The sheer volume of personal information online, however, offers insurers with the right algorithms the potential to use social media and other publicly available data to assess behavioural patterns for risk, and pricing cover accordingly, says Christelle Colman, insurance expert at Old Mutual.

Colman said that this is already happening in a few developed markets.

“It is just a question of time before this becomes general practice in South Africa’s insurance market as well,” she said.

“On a more pedestrian level, however, South African insurers are already using social media for a range of verification purposes.”

She cited a recent case where Old Mutual Insure dealt with an accident claim on a very expensive, and new, imported sports car owned by an elderly gentleman.

The claim recorded that the gentleman was driving the car at the time of the accident, early one evening.

A brief search on social media, however, turned up evidence that, “the gentleman’s son, an aspirant racing car driver, was out on the town with the vehicle that night, and that the accident actually happened much later when the owner was home in bed,” said Colman.

She added that simple things, like mobile phone records, can locate people.

“Most insurance application processes obtain permission for insurers to access policy-holders’ mobile phone and other records as a matter of course.

“Smartphones only increase the amount of personal information potentially available to insurers, “but also to criminals if these phones fall into the wrong hands.”

Colman said that the trick is to be aware of the information that you and your family members share on all the platforms and devices that you use, “and then take deliberate steps to protect the data that you absolutely have to share”.


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This South African lost out on insurance because of social media – here’s what happened