New York insurers may use social media data to evaluate premiums
Source: Asia Insurance Review | Mar 2019
New York’s Department of Financial Services (NYFS) has released new guidelines that will allow life insurance companies to use data from customers’ social media posts to determine their premiums. Experts say that these rules could potentially extend beyond New York’s borders.
The new guidelines suggest that companies can use data from other ‘non-traditional’ sources as well, although insurers will have to prove the information doesn’t unfairly discriminate against protected groups.
“An insurer should not use an external data source, algorithm or predictive model for underwriting or rating purposes unless the insurer can establish that the data source does not use and is not based in any way on race, colour, creed, national origin, status as a victim of domestic violence, past lawful travel, or sexual orientation in any manner, or any other protected class,” said the guidelines.
The NYFS press release states that insurers’ use of external data sources has the potential to benefit insurers and consumers alike by simplifying and expediting life insurance sales and underwriting processes. External data sources also have the potential to result in more accurate underwriting and pricing of life insurance.
The use of social media by insurance companies has been a topic of debate for years now, although there’s very little legal guidance about what privacy rights we have when posting online.
The new ground rules also warn life insurers using non-traditional data that they are responsible for analysing their algorithms to be sure they are free of bias against protected groups. This means that they can’t simply shop for algorithmic software and employ it without thorough testing first. A