The Benefits of Social Media Background Reporting for Insurance Underwriting
Social Discovery Corp's latest blog explores how insurance companies can apply effective social media background reporting toward optimizing their underwriting processes. We uncover how social media platforms offer insights into a policyholder’s profile, enabling account managers to effectively calculate the risks and considerations -- such as fair trades -- often associated with a policy.
Underwriting is an essential process in the insurance industry, providing a precise declaration of the scope and risks involved in policy coverage. While traditional policy providers may focus on assessing factors such as credit scores and prior insurance claims, there are deeper insights found in social media as individuals spend more time within the internet community.
Social Media Background Analytics in Personal Injury Underwriting
According to data from the U.S. Department of Justice, Bureau of Justice Statistics, there are an estimated 300,000 to 500,000 personal injury claims within the U.S. each year. In most cases, claimants receive compensation and settlement without a courtroom trial. Therefore, insurance companies must ensure accurate underwriting to provide policyholders with rates that correlate with risk and predictive losses.
Recent market research shows that besides other personal factors, social media information provides underwriters with an effective data combination that optimizes predictive ability. Specifically, insurance companies can acquire informative social media data from the quantity and type of social postings, topics, and locations tagged to online activities.
For example, insurers may tap into social media analytics, such as flagged comments from social media contacts, to discover if a policyholder is reckless behind the wheel. Underwriters can then evaluate the safety standards of the insured individual and calculate a personal injury premium.
While criminal or traffic records provide a history of the insured, they fail to account for dangerous behaviors that evaded the law. Social media background analysis and reports can provide underwriters with the missing pieces of the puzzle to identify the earliest or most elusive signs of insurance fraud.
Minimize Underwriting Losses with Social Media Background Analysis
A recent study by Statista indicates that by 2026 approximately 94 percent of the population of the U.S. will be using social media, up from 70 percent in 2020. As of February 2022, Facebook/Meta users accounted for 71.8 percent of all social media users. As such, insurers can glean a wide range of valuable user information for underwriting projects of every scale and background.
Social media background analysis sheds light on the lifestyle habits, movements, and actions of policyholders, which helps insurance companies reduce the risk of heavy underwriting losses that occur when more capital is spent settling claims than is received in premiums.
You can effectively tweak underwriting practices based on accurate risk levels to prevent unmerited claims through accurate social media analytics and reports. For instance, social media photos of individuals undergoing dialysis may indicate a false declaration of good health and warrant policy reassessments.
While the insured might withhold information on their drinking habits, accurate social media background analytics can provide proof of contradictory behavior, such as frequently tagged drunk photos, so that you can adjust your underwriting accordingly and minimize losses.
Big Data and Underwriting -- Interpreting “Unspoken” Insights
The world of social media has become increasingly intermingled with big data and the IoT. In some cases, insurers may optimize underwriting practices based on telematic (i.e., sensor-based) information shared through connected devices on vehicles and wearable tech.
Policyholders may sync their sensor readings across social media platforms, providing underwriters with insightful indicators of health risks that could affect insurance coverage.
For example, a client might post a series of poor sleeping pattern logs from an app, suggesting a potential underlying medical problem. Similarly, underwriters might take careful notice if a policyholder shares a favorite GPS cycling route that passes by a hazardous construction site.
It's clear that social media background reporting and analytics can help drive accurate underwriting through various data channels, even via unintentional sources; however, a strictly computer-based interpretation of social media data could lead to a new set of issues among insurers. An algorithm-only strategy can all too easily result in an unconscious bias against some individuals, engendering high premiums that do not correlate with the insured’s actual risk profile.
Insurers need to base their underwriting projections on a more holistic approach to social media analytics which focuses on maintaining fair pricing practices during policy arrangements. The Social Discovery Corp team can help achieve this through a combination of AI analytics and human expertise.
Social Discovery Corp -- Your Trusted Ally in Social Media Background Analytics
Social Discovery Corp comprises dedicated analysts specializing in social media background analytics and reporting.
We leverage the concept of accurate intelligence, a unique combination of precise algorithms with contextual knowledge from human experts. Social Discovery Corp eliminates the risks of false positives that often compromise the efforts of social media research.
At Social Discovery Corp, we believe there is no one-size-fits-all solution for social media analytics. That’s why we will work with you every step of the way to round up the most valuable data for a precise assessment of each client profile.
Our broad range of clients includes Fortune 1000 companies, the top insurance providers in America, and the world’s largest third-party administrator. We continue to develop solutions to help clients acquire relevant data from the complex social media sphere to achieve optimal outcomes.
The next article in our series shares the significant advantages of applying accurate social media intelligence reporting to claims processing and verification.
Reach out to Social Discovery Corp for a demo on how reliable social media background reporting can benefit your insurance firm.