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Practice Management > Marketing and Communications > Social Media

Millennials, Their Digital Data, and You

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Technology is integrated into digital natives’ lives and habits more so than any previous generation.

They came of age with the World Wide Web, and the youngest were 11 when Apple introduced the iPhone. These digital natives have been on the Internet and social media their whole lives and know how to get around it and find information.

Not until recently, largely owing to the Cambridge-Analytica exposé, has the general public been focused on how companies are using publically available data to predict and influence public behavior, with the support of big data, analytics, and algorithms.

(Related: 5 Ways to Increase Acquisition Success in the Life and Annuity Space)

As such, the same applies to the insurance industry with the state of New York’s new policy allowing the insurance community to use “external consumer data” to underwrite life insurance policies for consumers based on risk profiles pulled together from non-traditional data sources.

Coupled with automation, access to data such as electronic medical records, health claims data, and social media information are now enabling insurance carriers to greatly decrease underwriting and cycle times. Some of the more innovative carriers have already started offering completely fluid-less underwriting without the need for an attending physicians statement (APS).

The overall intent of the policy is to establish the ground rules for the use of publicly available information and minimize marginalization of protected groups on account of religion, race or gender. The policy dwells on two primary subjects — first, the use of individual social media data and second, the use of social media meta-data and algorithms to predict and differentiate at-risk groups.

The regulation document primarily stresses on “unlawful discrimination” using Big-Data algorithms to sift through social media data sets, followed by the issue of “consumer disclosure” of criteria used for premium discrimination and the overall “transparency” of the process. Only cases where the insurer can present a “valid explanation or rationale” will result in the option to use social media data, increasing compliance burden for carriers.

With the enforcement of the policy, algorithms will take on a different color. The insurtech market will be directly impacted with certain benchmarking and bias-proofing mechanisms emerging as mandatory elements of algorithms used by the insurers and vendors.

The concept of the algorithmic impact assessment will have a role to play here, making insurance offerings and claims settlement more efficient. The market will also have little choice but to adapt and be resilient to what is being called the “goals to guidelines” model in AI-based research.

Besides looking at algorithmic bias, the insurance and insurtech industry will need to evaluate data privacy from a whole new perspective. The EU and certain technology-savvy states like California are already enacting laws that will grant consumers and social media users more control over how and why their data is being used. One example is the California Consumer Privacy Act of 2018. The other development in response to data privacy concerns is the use of “opt-in” collection of social media data to target and guide healthy behavior among the general population and Millennials.

In the digital era, consumers — especially Millennials — are tracking everything from the food they eat to the number of steps they take everyday. Our research shows that millennials might be more willing to buy insurance if their real-time health data could reduce premiums.

In the very end, this policy is the start of a much larger conversation around what constitutes public data and how it might be used. Insurers should seek to use this policy to extend the e­fficacy of their products and should consider trying to influence consumer behavior in return for valuable services and unbeatable customer experience.

— For more of our life and annuity deal coverage, see our Active Shoppers archive, on ThinkAdvisor.

Ashish Jha (Photo: SE2)Ashish Jha is the chief marketing and communications officer at SE2, a technology services firm and third-party administrator that services companies in the life insurance and annuity sectors.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.