Insurance firms' social media spying sparks privacy concerns
Privacy rights groups have expressed concern over how insurance companies use information gathered from social media when setting customer premiums. Last November, Admiral Insurance faced widespread backlash after it revealed it was going to use Facebook data when setting car insurance rates. Facebook later withdrew permission for the insurer to use its data. Joe Ridout, customer services manager at nonprofit advocacy group Consumer Action, has advised social media users to restrict their use of the platforms if they have a pending insurance claim. 

If you’re a millennial, you belong to a group that’s far more likely to share your lifestyle habits on social media than any others.

But before you post that new great shot of you skydiving, partying, or zip-lining through the jungle, consider whether you want to share it with your insurance company.

Because there’s a good chance they’re watching.

Insurance investigators often scour customers’ social media accounts when they’re investigating insurance scams or possible misrepresentation. In fact, millennials (or anyone else) who tell their insurance company they have a Chihuahua and then post dozens of pictures of their sweet old pit bull on Facebook may get a surprise call from their carrier. But what if insurers go further, using innocent information from your social media posts to deny you coverage or increase your premiums?

That’s a different story, says Joe Ridout, customer services manager at the nonprofit advocacy group Consumer Action. Ridout has described insurers snooping on social media for underwriting purposes as “an outrageous intrusion.”

As a case in point, Ridout points to a controversial plan by the European company Admiral Insurance to analyze drivers’ social media profiles and personalities to determine their level of risk behind the wheel. The company developed an algorithm to scan users’ Facebook posts for clues that would supposedly show them to be either safety-oriented or overconfident, rewarding athe drivers they interpreted as “safer."

“Admiral was planning to base premiums on policyholders’ ‘likes’ and how often they use exclamation points, or how often they use the terms ‘always’ and ‘never,’” says Ridout. “They believe those things make you a riskier driver. That sounds like unambiguous nonsense to me.”

The UK-based Open Rights Group, a digital privacy rights organization, also criticized the plan as discriminatory and intrusive.

“Young people may feel pushed into such schemes because of financial constraints,” executive director Jim Killock said in a public statement. “The right to keep things private shouldn’t be the preserve of those who can afford it.”

The program was optional and would only bring car insurance rates down, not up, according to Admiral. But could the algorithm be used to discriminate against millennials and younger people in general?

Ridout says there’s little doubt about that.

“If you take a 60-year-old driver and a 20-year-old driver, who is going to use more exclamation marks, emojis or exuberant language? It’s going to be the younger driver. The average millennial social media user will use many more exclamation marks, solely as a function of their age.” These so-called “negative indicators,” he says, have nothing to do with driving responsibly.

Ridout says the algorithm frowned on fragmented sentences in social media posts, which are also more common among millennials who grew up texting than older people who grew up writing letters. “By using such a crude algorithm it just means the company is about to engage in age discrimination,” Ridout says.

Admiral Insurance was forced to withdraw its original plan last November after Facebook withdrew its permission for the company to use Facebook data to set auto insurance rates. Admiral did not respond to a request for an interview by press time, but a version of the plan, which targets first-time drivers, is still on its website.

Insurance experts say that insurance fraud accounts for $30 billion per year in property/casualty losses—and that investigators are most likely to take an interest in your social media posts when you have a large claim pending.

Marisa Rudy, supervisor of analysis for the special investigations unit at Mercury Insurance Services, says that the company looks to social media “to make connections between the involved parties to investigate if the loss was possibly collusive” – such as a staged car accident.

Ridout has no problem with that kind of research.

“I think it’s appropriate [to use social media] when investigating insurance fraud,” says Ridout. “But when it comes to setting premiums, looking at social media to see who likes what or who tags whom and making assumptions about people’s behavior, that’s a problem.”

And it’s one that’s bound to grow along with social media use. By 2016, one in 10 Americans had a social media profile. Facebook alone has over 1.4 billion users, offering a trove of information. In addition to reading your posts, investigators can track down your friends and family and read about you in their posts.

The Santa Barbara-based company Social Intelligence, for example, has developed a Social Media Risk Scoring “solution” for property and casualty insurers.

To Ridout, the Admiral case suggests that some insurers “are on board with using social media content to set your premiums. I don’t need any more evidence to tell me that there is a movement toward utilizing this information against you if the insurer finds something they don’t like.”

So what’s a consumer to do? Here are several tips:

Check your privacy settings. Adjust your privacy settings to only share your information with close friends.

Lay off social media when filing claims. “If you have a pending claim, it would likely be in your interest to greatly restrict what you’re broadcasting,” advises Ridout.

Watch for tags. Even if you are very careful about what you post, a friend may “tag” you in a photo you may not want online, which insurers can view if it’s publicly available. If the images are problematic, remove the tags.

Contact your legislator. “Some states already protect consumers from insurers using credit score to determine premiums,” Ridout says. “States could move to protect consumers from capricious or invasive use of their social media.”

Mary Purcell is a freelance consumer finance and health writer based in the San Francisco Bay Area. She covers mortgages, business lending and insurance for MoneyGeek.com.