My colleagues, Catherine Stagg-Macey and Craig Beattie, released a research report today titled "
Consider a low-frequency, high-severity line of business such as high-limit personal umbrella. Improving selection on $5 million liability policies can have a significant impact on results.
How would these connections be established? Will the application process include a link to a person’s social networking page? Will insurers offer incentives such as rate decreases or coverage extensions to incentivize potential insureds to link their personal data to insurers? (I am sure that state insurance commissioners will want to weigh in on the legality and acceptability of this!)
Even if an insurer cannot gain access directly to someone’s page, the publically available information might provide useful underwriting information. For example, if someone checks the “no” box next to the “Do you skydive?” question on the application, but they are a “fan” of a skydiving equipment company, this will likely cause an underwriter to ask a follow-up question. Or, alternatively, this may result in an automatic decline by a rules engine applying eligibility rules.
Finally, even if there is no direct information available via social networking pages, it will be straightforward to construct relationship networks for an applicant and at least identify if they are linked to anyone for whom an insurer has in depth information about. To continue with the skydiving example, if several skydivers are linked to a prospective insured, it should create underwriting concern. Additionally, expect to see information vendors provide products that scan social networks for data that can be used to inform the underwriting process. Expect to see social networking reports alongside CLUE and MVR data.
Up to now, a good deal of discussion around social networking has been about how to use these tools for marketing and branding. Thanks to Catherine and Craig for extending the discussion into these other important areas of the insurance process.
This blog has been reprinted with permission from
Readers are encouraged to respond to Mike using the “Add Your Comments” box below.
The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.