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Friday, October 14, 2011

Using Facebook data for Insurance !!

The World is a virtual village ! – can you remember and recall your benchmate in your elementary school or college Or do you remember your batch of friends, say 3 decades ago. There is a theory propagating ‘Six degrees of separation’ – an idea that everyone is on average approximately six steps away, by way of introduction, from any other person on Earth – a friend, a friend of friend, friend of friend’s friend & so on…… so any two people would be able to connect in six steps or fewer !!!

There could be persons with similar likes, interests etc., and would it not be fun communicating to a like minded group ?  Would not you like to get back to your school friends or buddies of young ?   Mark Elliot Zuckerberg perhaps made it possible by his brilliant tool.  The internet entrepreneur is best known for co-creating the social networking site Facebook which attracts millions everyday. There are people who can live without their bread but not without access to FB.  For youngsters, it is a fad, a rage… though only persons above 13 years of age can open an account, there are lakhs of school children who have a FB account !  The social networking service of Facebook was launched in Feb 2004 and now it has more than 800 million active users.  Users may create their own profile, post their photos, add friends and exchange messages – and also see the messages posted by their friends, friends of friends !.   There can be further groups and categories organized according to your likes.  

FB is not alone.  Tencent QQ; Facebook; Ozone; Netease; Windows live messenger; Tencent weibo; Habbo; Twitter; Skype; Badoo; Orkut; Bebo; Vkontakte and Linked in top the Virtual communities with more than 100M users.   This is no post urging to open a FB account and connect with people.  (I have one but am not the one who chats on line or habitual daily watcher of FB)

When many people converge, the industry watches and tries to take advantage of the same.  There is a news items today that the Insurance industry is paying increasing attention to what people and businesses post on social networking sites like Facebook, Twitter and LinkedIn.  It is reported that  scouring Facebook and other social network pages of the insureds is a common practice on the claims side of the business.   Though not exactly the practice in India, especially when it comes to Claims, it is stated that many  investigators follow the FB of the claimants especially when looking in to potentially fraudulent claims!!!!   In Western countries, the data from out of social network is being used and reportedly admitted as sources of evidence in courts of law in claims cases.  (source : InsuranceJournal.com)

Insurers sure would start putting up advertisements on social media. As users interact with multiple social networking sites, purchase items online, and communicate with others in public forums, they leave behind data about their preferences, lifestyle, operations and habits and this could help in creating risk profile.   As one knows  there is data mining from all possible sources and perhaps not before long, lot of data would be procured from the social networking sites on the potential customers, their habits, the hazards etc., finally finding their way into Underwriting process, determining the premiums and terms and conditions !   The other useful piece of info could be the ‘social graph’ which shows the links of people and who follows whom ! – which can be helpful in making behavioural study of moral hazards…

---- but all these are in theory and in some contradiction as there are also reports that a very high percentage of users are young (in fact school and college goers whose data may not matter much for an Insurer)

Away from Insurance, if you are a regular in FB, do understand that bypassing certain privacy settings is technically possible.  You could be watched and tracked by somebody (either authorisedly or unauthorisedly) and hence should be cautious in your activities.  Recently there were reports that FB has been tracking its users even when they were offline and that FB monitors every single web page its members visit !   Not for nothing, they run this free service enabling you connect with your friends; the data obtained could help FB make billions of dollars every year from advertising as ‘information is knowledge and knowledge is very powerful’..  there are cookies which keep tracking your activity all the time…  there have been privacy intrusions in some social networking sites.  There is further news that a Former Louisiana Attorney is suing Facebook over allegations that the social networking site collects and stores users’ Internet browsing history without their permission. Similar suits have been filed in other states, including Kansas and California.  However, FB spokesperson stated that the company believes the suit is “without merit” and will “fight it vigorously.”

Google Plus launched in June 2011, operated by Google Inc  is giving a tough fight to FB. Will that make you run to open an account there also (or you have one already ?)

Regards – S. Sampathkumar.

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