Using social data in claims and underwriting—creating a social risk profile

Enthusiasm regarding the potential of social networking must be tempered by the recognition that the use of social data is still in its formative stages, says Celent in a recent report, “Using Social Data in Claims and Underwriting: Creating a Social Risk Profile.” The report focuses on the insurance industry, but could be useful to bankers, as well.

Key findings of the report include:

• Insurers should care about social networking because of who is using it and what is being posted. Usage continues to grow in absolute numbers and to expand into all age groups. The information that is posted by individuals on multiple sites reflects their preferences, lifestyles, and habits. Postings from companies include descriptions of product offerings, services, and operations. In both cases, this social data can be used to build a real-time risk profile. When integrated into an insurer’s existing process and automation environment, this profile can improve underwriting and claims results.

• Most insurers are currently involved in only defensive actions. Celent expects that, over the next three years, companies familiar with social media will begin to apply social data to their businesses. These companies will look to the vendor community to provide tools that enable them to efficiently capture and store data, accurately identify online profiles, and effectively analyze social data in order to both grow and to reduce claims costs.

• This transition will not be without challenges. Key techniques that must be developed or enhanced include authentication methods, improved data extraction tools, and more advanced analysis tools. Additionally, regulation concerning the use of social data is evolving more slowly than the technology and potentially will significantly impact the use of information collected from these public forums.

• There is a huge marketing and engagement potential for insurers from social networks and social media. Celent believes that the use of this data in other processes is a natural evolution of insurers’ engagement with customers. Insurers already improve customer experience by leveraging third party data, and, over time, social data will be added to this mix.

 

 

http://www.celent.com/reports/using-social-data-claims-and-underwriting