Could social media posts really determine your insurance premiums?

Admiral says it want to use customers' Facebook feeds to set its prices, but is it just a PR stunt?

by Jack Torrance
Last Updated: 02 Nov 2016

Next time an elderly relative tells you social media is a waste of time, point them in the direction of Admiral. The insurer has today announced plans to analyse its customers’ Facebook posts to improve the accuracy of its premiums.

Apparently that status about how much you were enjoying your trip to the Algarve, the message wishing your old school friend a happy birthday and that selfie you took on a night out contain ‘signals’ as to whether you are likely to be a safe or careless driver.

In particular the firstcarquote service will look for signs that users are well-organised and conscientious - ‘These include writing in short concrete sentences, using lists, and arranging to meet friends at a set time and place, rather than just "tonight",’ according to the Guardian. The idea is to use the data to make it easier for customers buying their first car to get coverage that is affordable.

Before you get carried away tidying up your angry posts and deleting those debauched Facebook pics, it seems the roll-out of Admiral’s service isn’t going quite to plan. Apparently it contravenes the social network’s terms of service, which say its data shouldn’t be used ‘to make decisions about eligibility,’ and Admiral has confirmed the roll-out has been delayed, to ‘[address] a few outstanding issues.’

That’s probably less a case of Facebook being concerned about its users’ privacy and more an issue of commercial intent. It didn’t get to a market cap of $360bn (£290bn) by giving away all of its precious data for free.

But even if firstcarquote does get canned this won’t be the last time we hear about this type of tech. Marketeers and financial services firms are hungry for more and more insights about their customers and technologists with a passion for ‘big data’ say it has massive potential to transform the way business is done.

Several start-ups have emerged that claim they can determine a customer’s eligibility for credit based on who they are connected to on social media and the types of things they post. I connected my LinkedIn, Facebook and Twitter accounts to friendlyscore and got a credit rating of 867/1000 – which paints a slightly healthier picture of my finances than my traditional Equifax score does, though I’ve no idea why.

But social media signals are only worth so much. It’s hard to imagine creditors care more about how you described what you had for dinner last night than what you have in the bank. Or that insurers are more interested in your use of exclamation marks than your claims history. And it would be ridiculously easy to game the system by setting up an account that’s full of sensible, well-written posts about how slow you drive and how carefully you manage your finances.

And there are privacy worries too. Admiral says the service will be opt-in and only be used to give customers a discount. But if it is effective then don’t be surprised if such intrusion becomes a prerequisite for other services in the future. The latest series of Black Mirror, Charlie Brooker’s excellent if cynical depiction of how technology could shape our society, touches on just this issue.

Its first episode depicts a future where all humans are assigned an ever-fluctuating score out of five based on how they are rated by others on social media. Those on 4.5 and above are welcomed into the upper echelons of society and afforded access to the best homes, jobs and other trappings of success. Those with a score below two are shunned. It’s a far cry from slightly adjusting a person’s insurance premiums but nonetheless a chilling extrapolation of what our data-driven future could entail. But I digress.

Admiral’s new service is probably as much a marketing ploy as an attempt to change the way its premiums are calculated. Few of us actively bother to switch insurance providers so getting customers while they are young by claiming you have a cool new way to give them a more reasonable premium is a smart move. We’ll have to wait and see whether Facebook agrees.


Update: Admiral's plans seem to have been all-but thwarted, for now at least. Users will still be able to log in to the firstcarquote app via Facebook but will then have to answer some questions, on which the quote will be based. The insurer describes this as launching with 'reduced functionality' but it completely defeats the stated purpose of the service A Facebook post in on its page this afternoon read as follows: 

'In response to today's coverage, firstcarquote would like to assure customers that Admiral doesn't use social media data to set prices for its policyholders.

They haven't and don't access existing customers' Facebook data.

Admiral launched this new brand - firstcarquote - for new drivers who can get a quicker & cheaper quote via Facebook.'

If you wanted any more evidence it's just a marketing wheeze...

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