Celent Says

Social Networking, Meet Underwriting

Mike Fitzgerald
Insurance Experts' Forum, October 6, 2010

Our esteemed social networking guru, Craig Beattie, recently circulated a blog posting that he found.

It describes an internet company, Social Intelligence, which monitors social networks to help companies with hiring decisions. Their data mining tool collects information from the major sites looking for behavior-based information about job applicants, and summarizes what is found in a report. It uses only publically shared data, and includes a review by humans to eliminate any “false positives.” There is also a service for continual monitoring of existing employees.

According to the blog posting, the company makes the point that with the emergence of social networks, shareholders will expect companies to use such services to evaluate new and existing hires and reduce the liability of the company from lawsuits, damage to reputation, etc.

Celent has not reviewed this company or its solution. However, in discussing what this approach might mean from an insurance perspective, several questions arose:

Will such monitoring be considered a mainstream risk management technique one day? 

Would an insured using such a tool be rated a lower risk than one that does not?

Should the shareholders of an insurance company reasonably expect the underwriting process to include the monitoring of social networking sites, especially for the general liability, disability and workers compensation lines of business?

In the past, such data mining has been blocked by regulators based on privacy issues, but if all this information is willingly made public will those objections still be valid? 

Social networking, meet underwriting.

This blog has been reprinted with permission from Celent.

Mike Fitzgerald is a senior analyst in Celent's insurance practice, and can be reached at mfitzgerald@celent.com.

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.

 

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

With Google Favoring Mobile, Will The Industry Take it Seriously?

Google’s search engine will now will favor mobile friendly content over traditional website content; within the insurance industry, the greatest initial impact is likely to be felt by insurance distributors.

Why Some Technologists Get Cold Feet on Mobile

There are those who believe that favoring one channel or mode over another will lead to even more silos and dysfunction than we already have in many organizations.

Insurance IT Spending and Budgeting Benchmarks

New research from Novarica highlights areas of concern and offers insights on insurers spending and budgeting decisions.

Enterprise Mobilemania Continues Unabated

More than half of companies are spending more on developing mobile applications -- but are they more efficient?

Why Insurers Need More Than a Policy Admin System

For some insurers, not being able to handle the volume of quotes that are being submitted to them means leaving significant money on the table.

The Pitfalls of Using Assembly Line Methods to Create Software

Most of the time, when the business needs IT, it is for custom software development, just like creating a concept car.