Be Careful How You Use Social Media; Your Life (Insurance) Could Depend on It

Life insurers haven’t changed their approach to underwriting for decades, relying heavily on costly medical screening, such as blood and urine tests.

However, that may be about to change. Life insurers want to monitor how you behave online as a way of assessing your health and bypassing more traditional methods.

According to a story in today’s Wall Street Journal, New York’s top financial regulator is going to allow life insurers to use data from social media and other nontraditional sources when setting premium rates, though the insurers will have to prove the information doesn’t unfairly discriminate against certain customers. Under guidance released earlier this month, life insurers will have to use statistical and actuarial analysis to determine that any algorithms and data are free of bias against racial minorities and other groups protected by law.

Consultants said the use of social media in underwriting decisions is limited so far. “The data exists and is being collected, but the quality and the integrity of that data is not yet demonstrated to be accurate enough to be an underwriting input at this time,” said Ari Chester, a partner at McKinsey & Co.

The story offered a list of some online actions that may an applicant avoid the medical exam:

  • Don’t post photos of yourself smoking on social-media sites.
  • Do post photos of yourself running. Riskier sports, like skydiving, could complicate the situation.
  • Use fitness-tracking devices that indicate an interest in fitness.
  • Purchase food from online meal-preparation services that specialize in healthy choices.
  • Visit the gym with a phone linked to a location-tracking service. If you visit the bar, leave your phone at home.

I don’t see much of a problem with such an approach.

My guess is that many people aren’t 100% honest when applying for life insurance. They try to paint the healthiest, lowest-risk version of themselves that they can. So if the insurance firms have a way to find corroborating evidence that either supports or refutes such claims, then I think they have a right to do so since they have a financial stake in the outcome of the underwriting process.

This article almost seems to be a follow-up to a story from over eight years ago, also in the Journal. That article looked at how life insurance firms were considering using the vast amounts of consumer-marketing data that are available about people’s habits, such as online shopping details, catalog purchases, magazine subscriptions, and leisure activities, and whether such data could reveal nearly as much about a person as a lab analysis of their bodily fluids.

In one of the biggest tests, the U.S. arm of British insurer Aviva PLC looked at 60,000 recent insurance applicants. It found that a new, “predictive modeling” system, based partly on consumer-marketing data, was “persuasive” in its ability to mimic traditional underwriting techniques.

There are certainly privacy concerns here as well as the possibility that such data could be used for discriminatory purposes. I also think there should be a time limit on how long such data could be sued. If someone posted something stupid on social media when they were 13, that decision should not haunt them for the rest of their life.

But hopefully, working out all of these issues is what regulators are for, so I think it is good they are looking at such issues now, rather than later.

Just like new laws need to be written as a result of the development of self-driving cars, new guidelines need to be written to ensure that consumer data is used correctly by businesses.

I think there are benefits to be gained from carefully analyzing the amount of data that is now available, leading to better decisions. As long as the concerns are properly addressed regarding the use of such data, then to me, it seems the benefits outweigh the costs.

As noted above, just be careful what you post on social media.Insurance companies are watching…


2 thoughts on “Be Careful How You Use Social Media; Your Life (Insurance) Could Depend on It

  1. I do not trust social media companies/google not to sell data about our browsing habits. It is downright creepy how I will look up something for myself or my children or husband (like flight info, health symptoms) and then ads start popping up on my facebook feed. I’m not even in facebook when I am looking this stuff up!

    This is so disconcerting and I can’t imagine if my health or life insurance rates were changed based on my browsing of symptoms/treatments for health conditions that I don’t have, but even worse if they would base rates on something I looked up online for someone else or was researching for an article….or our daughter doing something dumb but typical in college like drinking (or even smoking) at a party–that does not mean she has a drinking problem or is a chain smoker or abuses drugs…Michael Phelps was certainly a good insurance risk, but he did all those things.

    It is amazing how much privacy we have given up without realizing it–even people who have worried and warned about ‘big brother overreach’ by our govt, where there are laws/protocols in place for privacy, whereas corporations set their OWN privacy policies which they can change on a whim (and bury the details in legalese that few people read before clicking “ok”.

    Maybe we unwittingly gave “permission” to google to share our browsing info when we clicked a box of permissions we “had” to in order to get access to, say, the “” a parent set up so we could take our turns bringing snacks for our kids basketball team … or in helping a friend whose spouse just died signing up for meals on a wiki website (set up so all the meals don’t come on one evening but are spaced out).

    Technology can do wonderful things and terrible things (see Russian spread lies/propaganda that smears good candidates and elevates bad ones).

    Insurance companies already bilk their customers , make us fight for reimbursement, pay their CEOs salaries far out of whack with the pay of underlings and reward executives for the wrong things for customers but the right things for wall street.

    Are you familiar with, former Cigna exec turned whistleblower?

    I would not trust these companies nor the social media companies to do the right thing with our social media data/browsing habits. If you follow Chris Wylie on twitter you can see that even after the whistle is blown, facebook/twitter still can not get a handle on the work of bad actors infecting and manipulating their platforms.

    Be careful how you use social media is an understatement, yet I put it out of our mind until ads appear in my screen and I know facebook has been sharing my data.
    Yes, I check and adjust my privacy settings, but one click on a new website to buy something I want/need and suddenly it seems other businesses hawking related products/services now know my browsing habits too.

    Pandora’s box. I do not think the profit motive belongs in health care or health insurance…tho I understand this is how our system has worked for decades (a century now?) But that does not mean it still works for well consumers or small corporations even… too much wealth is concentrated with the biggest players and most of that goes to their top executives and wall street financiers at the expense of, as Wendell Potter points out, the thousands of people he sees lined up for treatment at free healthcare clinics.

    Sorry did not mean to write a book, but it is worrisome.


    1. Hi, Susan. I always look forward to reading your comments because you get me thinking about the other side of many issues I’ve written about. I agree with nearly everything you’ve written; one difference we might have is that it doesn’t bother me too much when I see ads pop up from a web site I may have visited.

      I am also not sure of exactly how the insurance companies plan to use such data. Is it meant to avoid the more costly medical testing? If so, and they used my social media habits to make a life insurance decision that I did not agree with, I would hope that I have the option to question such a decision, and ask to have the medical tests to prove my viability for insurance. If it is meant to be a supplement to the medical test, I think that would provide useful info. If someone put down that they are a non-smoker, yet the medical results suggest otherwise, I don’t see a problem with them going out to social media sites to verify your response.

      It seems as if companies and colleges are using social media websites quite a bit to make employment decisions and acceptance decisions; I have not heard too much backlash against the use of social media in those decisions, and to me it’s the same idea in the case of insurance.

      Thanks for the link to Wendell Potter; I plan to check his site later, and Chris Wylie’s as well (maybe there’s a blog post waiting for me to write from those websites!)

      Have a great weekend.


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