Imagine underwriting a claim using social media

Christine Rodrigues, Partner at Bowmans

With the increasing influence of technology on the insurance industry, social media is beginning to play a vital role in many cases.

Social Media helps brokers gain better insights into their clients, it helps them gain a better understanding of their client’s risks and it keeps them updated about the key life changes that they are facing. 

But does social media play a role when it comes to underwriting? What is allowable and what is not allowable? Is there a line between information that is private and information that is in the public domain? In an exclusive interview with FAnews, Christine Rodrigues, Partner at Bowmans, discussed these topics in more detail. 

Where does an insurer draw the line between information that is in the public domain and invading privacy?

There is a fine line between information found in the public domain and the privacy rights of an individual. People generally don’t consider the privacy terms and conditions when posting comments and photos on social media platforms. Once something is posted in the public domain, it can be utilised and accessed by anyone. 

In South Africa, there is currently no specific law that regulates the use of social media. This makes it particularly difficult for users to identify what they can and cannot post on their personal pages and to determine how far is too far when expressing their opinion online. 

However, despite there being no current legislation regulating social media in South Africa, the Electronic Communications and Transactions Act (ECTA) and the Constitution of South Africa have, in recent times, provided helpful guidelines. 

The Protection of Personal Information Act (POPIA) was enacted to provide improved protection of personal information. The purpose of this legislation is to regulate how the personal information of individuals is processed by a data controller. 

Personal information is defined broadly in the legalisation to include information relating to sex, gender, religion, and information relating to education. This definition is comprehensive enough to include personal opinions, views or preferences of an individual. 

Therefore, where a person has social media accounts which are protected, and an external person or company gains access to the private accounts without the consent of the user, this may be an infringement of both the ECTA and POPIA. 

However, a user cannot seek protection from either the ECTA or POPIA if information on their social media accounts are made public. 

Can an insurer use information that appears on a social media platform as a basis to reject an insurance claim? For example: parents insure a car and lists themselves as the primary drivers of the car. In a social media post, their teenage daughter posts a very grateful message to her parents for the car which is a gift to her.

As mentioned above if a user’s profile and posts are shared publicly, there is no reason why an insurer cannot use this information in assessing a claim. 

You have forgone your right to privacy. This is clear from the case of Harvey v Niland. 

However, an insurer cannot use entrapment to gather this information because then it is an infringement of a person’s right to privacy. 

How will social media influence the insurance industry in the future?

With fraud being rife within the insurance industry, insurers will use all avenues to gather information and clamp down on fraudulent claims. 

This will safeguard the sustainability of the insurance industry and ensures that an insurer’s honest policyholders are able to be paid when they lodge their valid claims. 

What do insurers need to do to come to terms with the growing influence of social media? The Nathan Ganas case from 2018 is a prime example of how the industry cannot cope with the power of social media.

The Ganas case highlighted that social media and public influence can impact even valid terms and conditions of a contract. With the Ganas case, even the Long Term Ombud found in favour of the insurer.  

The Ganas case highlighted how companies need to weigh up legal vs moral rights but also how consumers need to be better educated on insurance contracts and the implications of not complying with valid terms and conditions. 

It also highlights that if advisers are involved in the selling of an insurance product, they must ensure that they explain the terms and conditions of the policy to the consumer. Failure to do so may lead to a professional indemnity claim against the adviser as well as negative publicity on social media platforms. 

Editor’s Thoughts:
The impact of social media will only grow in the future. It will be interesting to see where the line exists between information that is private and information that insurers can use for underwriting purposes. Imagine a claim being rejected because of information found on social media? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.