Insurance Companies Can See Your Social Media. Time to Scrub Your Profiles?

Maggie Overholt
Maggie Overholt

Insurance is not an industry known for tech innovation or startup unicorns. Most of the companies that safeguard our homes, cars, and financial legacies are giants that have been profitably plugging along for generations—some since as early as the 18th century.

“Change in the insurance industry has, in the past at least, occurred at the speed of molasses” says Georgia-based personal insurance agent Jenny Saint Preux.

But then, we live in a time when improbable paradigm shifts occur with alarming frequency; even the president is a former reality TV show host. It’s no surprise that seemingly unshakeable monoliths like the insurance industry are beginning to bend to modern influence.

And yes, that does mean life insurance companies might be looking at your social media to decide whether they should insure you and how much you’ll pay.

Maybe you’ve heard murmurings about insurers “creeping” on your profiles; the topic has been covered by media heavy-hitters from the New Yorker to Forbes and the Wall Street Journal. This isn’t a dystopian vision of the future where six-pack Instagram abs determine the value of a human life. It’s something that’s real and, to some extent, happening now.

Industry experts say life insurance companies are beginning to consider social media in the underwriting process on a case-by-case basis.

At face value, the idea of a life insurance company snooping on your social media seems cringey. Think about it a little more and it starts to feel downright wrong. Implications about privacy violation, data selling, and potential discrimination spring out of the woodwork—and it’s easy to make the mental leap from “social media as a factor” to “that one-time after-bar cigarette comdemning my family’s financial security.”

Fortunately, there are checks and balances built into the bureaucracy of insurance to prevent at least some of these fears from becoming reality. “We can’t forget that despite the excitement regarding current and burgeoning technological advancements within [insurance], we are still a highly regulated industry,” points out Saint Preux.

Unlike big tech, which often seems to operate on an act first, course-correct later model, insurers are strictly supervised by commissioners at the state and federal level. These bodies act as moderators, aiming to protect consumers who rely on insurance as a necessary service.

Which brings us to New York State’s Insurance Circular Letter No. 1, the fountainhead for this unusual wave of insurance gossip.

The circular letter was released in January by New York’s Department of Financial Services (NYSDFS), the state’s primary insurance regulator. It’s about 2,000 words long and chock-full of legalese—but one key point nudged its way into public conversation. It read:

“The Department fully supports innovation and the use of technology to improve access to financial services. Indeed, insurers’ use of external data sources has the potential to benefit insurers and consumers alike by simplifying and expediting life insurance sales and underwriting processes.”

The letter goes on to define “external data sources” as “retail purchase history; social media, internet or mobile activity; geographic location tracking; the condition or type of an applicant’s electronic devices (and any systems or applications operating thereon); or based on how the consumer appears in a photograph.”

Rapid translation: All the data. What you’ve bought, where you’ve been, what you’ve Googled, what you look like. It would be easy to leave things there and rush off to delete our Instagram accounts, but there’s a little more to the story.

The crux of New York’s circular letter was that insurance companies already have vast access to this kind of personal information. Social media might be a new frontier, but big data has been creeping in at the edges of insurance for a while now.

“On a macro scale, insurance companies are using third-party data more and more to help their underwriting,” says John Holloway, co-founder of life insurance site “Reports from data harvesting companies [like MIB, LexisNexis, and MVR] are used frequently to help determine risk from a lifestyle perspective.”

The challenge now for NYSDFS and other regulators is applying the same standards for fairness and nondiscrimination that govern traditional underwriting to equations based on new and “unconventional” data sources. There’s no clear path, though New York has attempted to outline general best practices:

“An insurer should not use an external data source … for underwriting or rating purposes unless the insurer can establish that the data source does not use and is not based in any way on race, color, creed, national origin, status as a victim of domestic violence, past lawful travel, or sexual orientation in any manner, or any other protected class.”

Still, we’re left with the question of how Facebook and Instagram photos currently factor into the life insurance equation. For the most part, experts say, they’re a mode of verification.

“Underwriters, to my knowledge, are not actively seeking to review applicants’ social media activity,” says Saint Preux. It would be incredibly expensive and inefficient to have employees troll each applicant’s social media for red flags, and the insurtech required to automate that type of fine-toothed combing doesn’t exist yet.

“Rather,” Saint Preux continues, “the review has to be prompted by concerns regarding the applicant’s credibility.”

In other words, if your insurance company had reason to believe you misrepresented yourself or fudged the numbers on your application, it might look to your social media profiles to confirm (or disprove) those suspicions.

That means it’s not quite time to whip out your old trainers and sprinkle a few jogging photos throughout Instagram in the hopes of lower insurance rates. But it also means you should continue to think twice about what you share publicly—employers aren’t the only ones tut-tutting over red cup photos anymore.

Real-time use of social media to underwrite life insurance is infrequent at best, but it’s still worth being judicious about what you share online.

Pictures showing tobacco use, frequent drinking, substance dependency, extreme sports, and any other habit or activity that directly puts your health at risk could jeopardize your standing with an insurer on the off chance that they decide to go digging. So either skip the post altogether, or, as a recent column in the Wall Street Journal says, take the simple step of changing your sharing settings to “private” to limit views to friends and family.

And as a rule of thumb, be honest on insurance applications. Whether it’s through a Facebook post, database, or traditional blood-and-urine medical exam, underwriters are bound to catch on if you’ve bent the truth, and it’s not worth risking necessary coverage in order to save a few dollars per month on your premium.

For more information about rules and regulations regarding the use of social media and other third party data sources in life insurance underwriting, see the New York State Department of Financial Services Circular Letter No. 1, 2019.