So­cial-me­dia ac­tiv­ity could af­fect your in­sur­ance claim

In­for­ma­tion you dis­close on pub­lic fo­rums can be used by in­sur­ers when it’s time to pay out, writes Maya Fisher-French

CityPress - - Business - Edited by Maya Fisher-French per­son­al­fi­nance@city­press.co.za

’’ The in­surer has the right to pro­tect it­self against fraud

At a re­cent in­sur­ance sem­i­nar, Maria Philip­pi­des, di­rec­tor at law firm Nor­ton Rose Ful­bright, raised the ques­tion of whether an in­surer could use in­for­ma­tion col­lected from your so­cial-me­dia posts to as­sess your risk pro­file and ver­ify claims, which high­lights the fact that we give up our right to pri­vacy when we take to so­cial me­dia.

Ac­cord­ing to Philip­pi­des, big data, which is made up of all the pub­lic in­for­ma­tion avail­able about us, pro­vides com­pa­nies with a great deal of in­for­ma­tion about their clients. They can as­sess where we shop, where we drive, what med­i­ca­tion we take and how much we ex­er­cise. When we sign up for loy­alty or in­cen­tive pro­grammes, this is ef­fec­tively the in­for­ma­tion we hand over. When we start post­ing on so­cial me­dia, that in­for­ma­tion moves quickly into the pub­lic do­main and we have very lit­tle con­trol over its dis­sem­i­na­tion.

Although much of this in­for­ma­tion is avail­able to in­sur­ers, South African law does ap­ply cer­tain lim­its. Philip­pi­des says the Equal­ity Act pre­vents an in­surer from un­fairly dis­crim­i­nat­ing against some­one based on gen­der, preg­nancy or age, for ex­am­ple, “so an in­surer can only use big data to tai­lor-make us­age-based, on-de­mand and ob­ject-spe­cific in­sur­ance prod­ucts that are specif­i­cally tar­geted to in­di­vid­ual life­styles and ac­tiv­i­ties”.

What this means is that, if the in­for­ma­tion the in­surer col­lects on you shows that you are a lowrisk client, they can of­fer you a re­duced pre­mium as an in­cen­tive to sign up with them. As the use of big data be­comes more wide­spread, we can ex­pect in­sur­ance com­pa­nies to start di­rectly tar­get­ing low-risk in­di­vid­u­als by of­fer­ing bet­ter pre­mium rates to en­tice them to make the switch.

“In­sur­ers face a bal­anc­ing act where they can use data to dif­fer­en­ti­ate, but they have to be cog­nisant of the prin­ci­ple of pool­ing risk,” says Philip­pi­des, who ar­gues that, while an in­surer can­not de­cline an ap­pli­ca­tion or load a pre­mium us­ing big data, they can by law use the in­for­ma­tion to de­cline a claim if fraud is sus­pected.

She uses an ex­am­ple of a South African short-term in­surer that de­clined a claim af­ter its client had a car ac­ci­dent be­cause it found a post on so­cial me­dia by the client’s teenage son. The post showed a pic­ture of her BMW af­ter it hit a tree, along with the cap­tion: “Crashed mum’s BMW af­ter a night on the town, but don’t worry it’s in­sured.”

Un­for­tu­nately for the mum, she lied about who the driver was that night and how the crash hap­pened, so the claim was re­jected.

In a case in the US, a woman’s claim for a lost wed­ding ring was de­clined when a pho­to­graph of her wear­ing the ring was posted on Face­book af­ter she made the claim.

So, where is the line be­tween pri­vate and pub­lic in­for­ma­tion? Do in­sur­ers have the right to use in­for­ma­tion on peo­ple’s per­sonal so­cial-me­dia ac­counts to refuse a claim?

Philip­pi­des be­lieves the law is on the side of the in­sur­ers as the Con­sti­tu­tion states that “ev­ery per­son has the right to ac­cess in­for­ma­tion held by an­other when that in­for­ma­tion is re­quired for the ex­er­cise or the pro­tec­tion of rights”.

Philip­pi­des ar­gues that the in­surer has the right to pro­tect it­self against fraud.

She adds that, un­der the Pro­tec­tion of Per­sonal In­for­ma­tion Act, this in­for­ma­tion can be used if you have given the in­surer your con­sent.

“In most in­sur­ance poli­cies, the client agrees that, when they sub­mit a claim, they will pro­vide all proof and in­for­ma­tion re­lat­ing to the claim, so con­sent is im­plied,” says Philip­pi­des, although she em­pha­sises that the in­surer still needs to fol­low due process when deal­ing with a claim – the in­surer must ob­tain con­sent to in­ves­ti­gate a claim fully and an­a­lyse fac­tual and med­i­cal in­for­ma­tion first.

In­for­ma­tion in the pub­lic do­main is to be used to sub­stan­ti­ate the in­for­ma­tion pro­vided, and the in­surer is obliged to en­sure clar­ity, au­then­tic­ity and ac­cu­racy of the in­for­ma­tion.

While com­pa­nies have a duty to use data re­spon­si­bly, the real­ity is that, when you use a smart­phone or sign up for a loy­alty pro­gramme, you no longer have the com­plete right to pri­vacy.

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