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Insurers Can Learn from Facebook's Digital Awareness

Mike Fitzgerald
Insurance Experts' Forum, February 12, 2014

This is the second blog post aimed at discussing the opportunities for digital technology in insurance within the framework of a higher design principle, one that is not technology-led, but speaks to delivering value for consumers of insurance (both individuals and businesses). The tenth anniversary of Facebook is an appropriate date to pass along this next installment.

Why? Because Facebook illustrates the difference between a narrow, technology-focused and a broad, solution-based design principle. If Facebook had been trying to only deliver digital content on the web (a tech-focused approach), it would still be only a posting site. However, with its introduction of the News Feed feature, it moved into the Awareness realm. It went from “look what I have been doing and I’ll look at your posts too” to a proposition “I want to be aware of what my network is looking at because I’ll probably be interested too”.

This shift reflects the key design principles of the Awareness approach:

  • Passivity of user – minimal or no user action to initiate Awareness (FB: don’t make the user look for news, deliver it to them when they sign on)
  • Pattern recognition determines activity and records preferences (FB: monitor what are friends doing and match that to the user’s interests)
  • Always on capability (FB: continually monitor activity and make it available when the user accesses the site)
  • Allows user to choose to “manage and/or turn off monitoring” when desired (FB: I wouldn’t identify this a strength to the platform so far)

Applying Awareness to insurance, I would add two additional key design principles:

  • Signal when a deviation from normal activity occurs using data analytics
  • Provide a user’s current and past location(s)

The objective of Awareness design in insurance is to prevent the unintentional retention of risk by continually allowing the insurer to be aware of the changing risk profile of an insured. It uses predictive capability to match data collected (at a very specific level of detail) with the external environment, and identifies changed and/or new risks faced by a person or business. It then delivers this analysis to the insured in a preferred format (text, post, email, phone call, etc.)

In my last posting on Awareness, I described a commercial insurance example.

Another example in health insurance involves continuous monitoring of an insured using their smartphone. If any one of several key biofeedback measures begins to register out of a normal range, the insured receives a text to schedule a doctor visit. The insurer is constantly aware of the health of the insured and takes proactive steps to intervene appropriately when needed.

Does this sound like Star Trek? Something we should be able to do in the future? A company called Tokio Marine Nichido launched such a product in Japan last summer (June 2012). The insurance policy provides a reimbursement ranging from $50 to $300 for the visit based on the final diagnosis.

As I mentioned in my earlier post, I am confident that we are ready to design digital solutions which change insurance from a backward-facing, financial indemnity product to a continuous, predictive, risk management service. I’d appreciate your views, either in reply on this blog, or you can reach me at mfitzgerald@celent.com.

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.

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