Facebook Blocks Insurer From Using Data To Set Premiums

The rise of social media triggered concerns that insurance companies might use information volunteered by social media users to set rates, with experts warning that they might raise premiums for people who unwittingly revealed risky behaviors or circumstances online. But what if insurers wanted to use social media data to offer lower rates? Surely no one would object to that, right?

Wrong! In the UK Facebook has put the kibosh on plans by Admiral, a British car insurer, to offer lower premiums to new drivers based on their Facebook profiles, the insurance provider revealed this week.

Admiral has planed to analyze Facebook profiles of first-time drivers who agreed to share their profiles with an algorithm that would determine whether they have cautious personality traits based on the content they posted. The insurer was going to offer the social media discounts as a feature of its new “firstcarquote” app on the Facebook platform.

Although it’s not clear what precise personality traits the algorithm was supposed to look for in text updates, Admiral apparently intended to reward responsibility as reflected in qualities like organization, punctuality, attention to details and moderation.

Previously Admiral data scientist Yossi Borenstein told the Guardian: “Our analysis is not based on any one specific model, but rather on thousands of different combinations of likes, words and phrases and is constantly changing with new evidence that we obtain from the data. As such our calculations reflect how drivers generally behave on social media, and how predictive that is, as opposed to fixed assumptions about what a safe driver may look like.”

However, Facebook forced Admiral to withdraw the social media pricing feature, citing its terms of use agreement, which specifically forbids companies using the platform to “make decisions about eligibility, including whether to approve or reject an application or how much interest to charge on a loan.”

According to Admiral, customers can still log in and verify their identities on the app using Facebook – but no other information from the social network will be shared.
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