January 15, 2016

Such is the awesome power of insurance regulator the Financial Compost Authority (FCA) that even the mere suggestion that it might get out its dreaded probe and go to work on some previously un-probed aspect of the insurance industry spreads shockwaves of dread and apprehension.

The latest news on this front, according reports in daily the Times, Financial Tides and other papers, is that the regulator’s probe may soon be out for insurers’ use of social media as a means of gleaning info on its customers.

Somebody has finally realised that modern humans’ incontinent postings on twitter, faceboot, LumpedIn and the like could tell insurers far more about them than the carefully edited details elicited by proposal forms.

Instances of insurers catching artless fraudsters out this way abound. Like that time Uvavu foiled a six-figure C4C plot by checking out claimants’ fakebook posts. But might they also be tempted to use so-called “Soc Med” as an aid to underwriting?

Could they? Would they? Should they? Does anybody care? And is it just data derived from Soc Med, or “Sodia” as it is now known, the regulator should be fretting over? Might insurers also be trawling data from loyalty cards, aggregator sites and other “online platforms” to get the dirt on their customers?

The issue, as the FCA is currently defining it, is something called Big Data (a term that alludes, not to the relative size of each component datum in a given quantity of data, but to the distinctively large piles of data accumulated as a byproduct of myriad twenty-first century online lives).

Back in November, the FCAers put out a “call for information” asking if anyone could tell them the answer to the following absurdly generalised questions: does Big Data affect “consumer outcomes”, does Big Dada foster or constrain competition, and, least comprehensibly of all, does the FCA’s regulatory framework affect developments in Big Data in retail general insurance?

The instructive value of responses to these questions remains to be seen (apparently the FCA will publish something later this year), but a well-known phrase that springs to mind is the one that begins “Ask a stupid question…”

A sensible preliminary ‘call for information’ might have asked ‘What does Big Data mean?’

Anyway, if it turns out insurers are somehow getting their hands on information, large or small, that they’ve no decent right to take account of, you can be sure the regulator will sort them out in no time at all flat.

But if – as a 2013 survey by the ABI found – 71% of people don’t like the idea of insurers seeing their social media posts, perhaps they should have thought of that before they wasted perfectly good 1s and 0s with their asinine self-absorbed blatherings in the first place.

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