TECHNOLOGY AND SOCIAL MEDIA ARE CHANGING INSURANCE

In her address at the Johannesburg function this week marking the release of her annual report, Deanne Wood, the Ombudsman for Short-term Insurance, noted that technological advancements and the everincreasing impact of social media have had a significant impact on the way in which the insurance industry operates.

“Consumers who may in the past have succeeded in taking a chance or presenting ‘alternative facts’ to insurance companies are often caught out by comments made on social media platforms,” she said.

“An an illustration, older drivers pay significantly lower premiums than younger drivers ... significant enough to encourage consumers to provide inaccurate information about who the regular driver of a vehicle will be. Our office sees far too many claims being submitted where, for example, parents have represented that they will be the regular driver of a vehicle when, in fact, the vehicle was purchased by them for use by their child.

“Simple desk-top investigations using Facebook or other social media searches can all too easily reveal misrepresentations made by consumers who forget to cover their tracks,” Wood said.

However, the ombudsman said she believes insurance companies could be doing more from their side to use technology at sales stage to assess the risk posed by the customer. “I am referring to underwriting information that could be easily accessible to insurers through database sharing or information pooling rather than obtaining it from consumers during sales conversations – for example, claims history or years of uninterrupted insurance.”

Wood said her office sees a large number of cases in which consumers provide sales agents with the wrong information simply because they could not accurately recall their claims history.

“In modern times where information of this nature is, or ought to be, easily ascertainable by reference to a database, there should be no need to leave the accuracy of such disclosure to the vagaries of human recollection,” she said.