SATURDAY, OCTOBER 15, 2011
by Ed Sneneh, Chicago Auto Insurance Specialist
Insurance underwriters are already using the internet in gathering lots of information about insurance subjects. This use is dramatic since the internet debuted in the last 15 years. The use of the internet by the insurance industry is still going through lots of challenges and updates. More intelligent work is needed before the insurance industry can reap the full potential of the internet.
Use of Internet In Insurance Underwriting
Insurance companies are now collecting information about insurance subjects from internet sources. Some of these sources may be very official and significant in authority while others sources may be unsubstantial and unsupported.
Property and casualty insurers may get details about vehicles from official websites such as county assessors websites, Carfax, Google earth, and other similar websites. While some of these websites may not be accurate (old Google earth of a ramshackle building) the information could offer significant amount of information that underwriters (people who actually approve policies) need before a policy is issued. For example, a Google Earth could indicate that a garage has a huge storage yard, besides the main building, that is full of trucks, which the garage owner(s) may have forgot to disclose that storage yard on the application.
Many homeowners insurance companies can get significant information about houses they insure such as square footage, age of the house, construction materials and surroundings of the house.
Health and life insurance companies are getting their information through the internet with Medical Information Bureau and other confidential sources with the proper consent of the customers.
Using Internet in Insurance Claim Services
Out of the US population who use the internet, about 3 out of 4 people age 18 to 29, 1 in 2 of people age 30 to 49 uses social media, and 1 in 4 people over age 50 years are using social media such as Facebook, Twitter, and Linkedin. Discovering “hidden data relationships in social media” as some specialists call it is one of the goal of insurance specialists who study social media and use the data in either substantiating legitimate claims, discovering discrepancies in claims, or even discovering false and frivolous claims.
Collecting and using private information collected on social media is facing several technical issues, ethical concerns and legal challenges as well. Solving the technical issues and bypassing the privacy setting of the users may not be the big challenge. However the ethical and legal aspects remain core concerns when it comes to using social media in claims processing. The fundamental challenge is to come up with a system that proves 100% and without any doubt that the profile of John Doe on Facebook refers to the real claimant of John Doe who has an auto insurance claim pending.
Using Internet in Insurance Communication/ Data Processing
Not long time ago it took the average independent agent some week or so to get a price for a commercial insurance package or to receive a declaration page on an auto insurance policy after it was requested by fax. The old days are gone. Independent insurance agents can now order customers MVRs, CLUE reports, compare insurance rates, issue policies, endorse policies, and even deliver policies all through the internet. The internet has crashed the time necessary to issue policies and deliver them to customers perhaps to only 10% of the time that was necessary some 15 years ago! That is a significant savings in terms of payroll, postage, and other administrative costs.
It is clear that technology, including the internet, is significantly affecting our social, political, economic, and financial life. The world is becoming smaller, and knowledge is spreading faster than what it was originally thought. Customers need to be aware that using the internet has significant effect on their privacy. What you write to your soulmate on Facebook Wall may not be a private issue any more, and may be used against you in the court of law!
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