A woman lost her insurance for a pic she posted on Facebook. When managing operational risk, insurance industry insiders do not discount running a Facebook search. If they were to look at your profile, what would they see? Could you lose coverage?
UK Warning: When Managing Operational Risk, Insurance Industry Gauges Possibility of Having to Pay Out by Facebook Status
Just this morning, a friend of mine posted – in extensive detail – her travel itinerary for yesterday, today and tomorrow as her Facebook status. Any crook doing even rudimentary data mining knows the one place where my friend and her family will not be today and tomorrow for sure: at home.
The Daily Mail agrees that this is a rather foolhardy use of one’s Facebook status, and might now even be used by the industry when managing operational risk. Insurance industry leader Legal & General suggested that the probability of crooks running a Facebook search for potential victims will eventually result in insurers doing the same thing.
Premiums may rise in keeping with what they find; on the flipside, even just having a Facebook account could – at some point – become a point against the consumer shopping for coverage.
The Canadian Cautionary Tale of Nathalie Blanchard, a Facebook Status and an Insurer
CBC News explained in late 2009 that Ms. Blanchard was on long-term depression-related sick leave from IBM. Coordinating her benefits payments was Manulife. After approximately 18 months, Manulife stopped making payments. The insurer suggested that a Facebook search of the insured’s profile turned up several pictures showing her smiling at a Chippendales’ show and other locales.
According to Manulife, this clearly showed that Ms. Blanchard was no longer so depressed that she would be unable to work. While it is clear that only a licensed psychiatrist or psychologist can truly make this diagnosis – not an insurance case worker with a fiscal bias in the denial of benefits – the fact that a woman lost her insurance for a picture she posted on Facebook underscores a potentially damning trend.
Insurance Groups on Facebook
Insurers are already making their presence known on social networking sites, and Celent outlines that insurance groups on Facebook include State Farm, Allstate, Nationwide, Progressive and Hartford Financial. Quoting from the report, Marilyn Lewis of Insure goes a step further; she outlines that the paper’s co-author warns how “within a year — or possibly two– insurance companies will be able to automatically sift through the torrent of personal data online to help decide who is most likely to file a claim.”
The Consumer’s Facebook Status as a Viable Tool for Managing Operational Risk?
Insurance industry employees running a routine Facebook search could indeed turn up plenty of fodder: photos of consumers smoking, drinking, skydiving or alerting everyone to their whereabouts. If your insurer ran a Facebook search on you today, would they renew your car, home, life or health insurance policies? Would these policies cost you more?
My friend might just see a higher premium for her homeowners insurance.