How ‘Insta-bragging’ could soon invalidate your insurance

Posting updates about your holiday on social media could leave you vulnerable to being burgled – and even worse, your insurer may not pay out if your things are stolen.

Experts have warned that “Insta-bragging” – posting boastful images of your holiday on photograph app Instagram – could invalidate a contents insurance policy.

This is because most insurers include a “reasonable care” clause which, although generally related to making sure windows and doors are locked, could in future extend to being responsible with what you share on social media.

Dan Plant, of MoneySuperMarket, said that with the average insurance claim for burglary just over £4,000, it means homeowners could potentially lose out on thousands of pounds of cover.

Mr Plant said that examples of cases where insurance could be invalidated include someone who has posted on a public Instagram page while abroad, checked into locations such as the airport on their way to their holiday destination or once there, and posted the dates/picture of their holiday flight when they’ve booked the trip.

The warning follows news that John Terry fell victim to a £400,000 burglary earlier this year after posting pictures of himself on a skiing holiday: unwittingly alerting burglars to his empty home.

The former England captain’s £5m mansion was broken into as he posed for pictures on the slopes with his wife Toni, and their children. He told his 3.4 million Instagram followers that he was having a “great few days away skiing with the family”.

Top tips | How to stay safe on social media
  1. Don’t tweet photos from inside or outside your home
  2. Don’t mention your address on any social network site
  3. Don’t announce any smashed windows or broken alarms in your home
  4. Don’t accept friend requests from people you don’t know on Facebook or Instagram
  5. Keep your social media pages private where possible
  6. Don’t announce when you’re going on holiday
  7. Don’t ‘check-in’ at airports or holiday destinations on social channels.

A gang of burglars took advantage of the opportunity, breaking into the property in Oxshott, Surrey, armed with axes and helping themselves to designer handbags worth £126,000 and rare signed first edition Harry Potter books valued at £18,000,  according to reports.

Both the financial ombudsman and local police forces have recently highlighted a clear link between holiday social media posts and a spate of burglaries.

Data from ADT, the alarm and security systems provider, revealed that 78pc of burglars use Facebook and Twitter to target potential properties.


Government’s Disruption in Insurtech Market: The Zebra CEO

Unsurprisingly, discussion surrounding government’s role in free markets with large corporations can be contentious, but it’s critical to understand that laws and regulations serve a purpose. To what extent regulation is appropriate has always been a hotly debated issue. The conversation is shifting from a debate on regulating large corporations to government’s role in tech companies’ ability to innovate–those like Uber, Airbnb and many insurance upstarts.

Today, most consumers in the U.S. have computers in their hands more powerful than IBM’s biggest computer just a few years ago. Technology impacts our lives in more meaningful ways than ever before, and at an increasingly accelerated pace. I had the privilege of addressing the issues surrounding technology regulation on a global stage in March at the South by Southwest (SXSW) Interactive Festival, which takes place every year in Austin, Texas, where my company, The Zebra, is headquartered. During a featured panel titled “Is Government Disrupting Disruption?” Mark Cuban and I discussed the political impact on tech companies at a global, national and local level. When is government a boon to innovation, and when does it run the risk of “disrupting” disruption?

At The Zebra, we’ve built a business addressing the consumer pain felt as a result of the complex regulatory environment that is property/casualty insurance. Our quote comparison marketplace leverages technology to help increase the efficiency of what has become accepted as the status quo in insurance distribution. Without delving too much into my own story, I’ll state a few relevant reasons I started this business:

  1. The increasingly ubiquitous consumer expectations for optionality and immediacy (which are still, to a large extent, unfulfilled).
  2. The lack of understanding of insurance– the different products, distribution, general value, etc.–among consumers, including my own family and friends.
  3. My experiences working in international insurance markets and observing the success and widespread use of insurance comparison tools, and my consequent questioning of why that sort of solution didn’t exist yet in the U.S.
  4. My understanding of both the limitations and opportunities of the state-level insurance regulatory environment in the U.S.

The former two indicated to me a need for a solution, while the last two drove my business plan–one which would disrupt the $200 billion-plus personal lines insurance industry.

Regulation created both a barrier and an opportunity when I first conceived of bringing a true online auto insurance comparison marketplace to the United States.

Regulation created both a barrier and an opportunity when I first conceived of bringing a true online auto insurance comparison marketplace to the United States. Such a marketplace didn’t exist here because each state regulates insurance independently, setting different requirements for minimum liability coverage, uninsured motorist coverage and how insurance companies can price for certain rating factors, among other things.

My team worked hard to navigate the insurance industry, and we used its highly regulated nature to our advantage–seeking publicly available information, building relationships with state insurance departments and understanding how insurance carriers evaluate risk.

The nature of The Zebra’s business model is, among other things, applying existing technologies to the data we obtain from carrier partners, rating platforms and publicly available rating information collected by state insurance departments to provide education for consumers on our platform. Consumers submit information once, and we immediately run that data through our proprietary technology to source full quotes from all applicable insurers for those consumers. A quote includes the coverage levels, effective dates, policy features and more, versus just the rate. The Zebra also goes beyond the quote and educates the user on how variables such as age, miles driven and region impact the rating.

We view the insurance regulatory environment as a barrier to entry for incumbents or other newcomers looking to disrupt the industry. However, it can be an advantage when there is this much nuance and complexity. It is the reason we chose to take a different approach and to innovate with cutting-edge technology. However, there are many cases in which regulation has slowed our efforts to the detriment of both consumers and insurance carriers.

Perhaps the biggest challenge is educating consumers on such a complex, overmarketed and therefore misunderstood product–one which they are required to purchase. For licensed agents, all the sales infrastructure and licensing fees add to both carrier acquisition costs and consumer rates. The varying regulation state to state confuses folks who are not in the industry and results in dumbed-down or oversimplified messaging. Consumers don’t know what to shop for, and carriers are forced to compete on pricing rather than product and brand differentiation.

The steep and slow-moving regulatory environment hinders insurers’ ability to respond (particularly from an underwriting standpoint) to new technology and market conditions. This ultimately harms the consumer, despite the purpose of trying to protect them. The 13 percent rise in claims through 2016 while premiums only rose 7 percent highlights the profitability challenges now affecting consumers. (Editor’s Note: Source of direct premium and loss changes, Brian Sullivan, Auto Insurance Report, based on an analysis of preliminary SNL Financial data, March 27, 2017.)

At The Zebra, we see carriers using our platform to get more and more targeted in their acquisition strategies, leaving more and more consumers with reduced options. Carriers can specify what type of consumer they are looking for.

All of these challenges prompted Cuban, moderator Michele Skelding, an Austin tech executive, and me to discuss government’s role in tech at SXSW.

Cuban, though known more for his Shark Tank stardom and courtside antics as owner of the Dallas Mavericks, has led, advised and financed many companies–The Zebra included–and has navigated government regulation time and again. He is a true entrepreneur.

In fact, during our panel, he discussed the time Uber CEO Travis Kalanick approached him with the concept of a new app-based ride-hailing service–an idea Cuban spurned because he questioned any new company’s ability to take on taxi associations and transportation organizations. (Editor’s Note: Cuban’s remarks about seeing the regulations of taxi associations as an obstacle to investing in Uber were also reported by the Dallas Morning News and on CNBC.) Consumers will ultimately win, evidenced by the adoption of ridesharing and success of TNCs (transportation network companies).

The insurance industry is currently seeing challenges and opportunities from technological innovation in the form of AI and driverless vehicles, enhanced safety technology, IoT. These aren’t just buzzwords. They’re real and powerful innovations that are changing the ways we get around, communicate and learn. Many insurance industry players are already taking advantage of these advancements, and others will be left behind.

What the industry wants to know, though, is whether the government will help or hinder that process.

For instance, with what many believe will be the onrushing prevalence of autonomous vehicles, consider if the government were to apply strict restrictions around rollout of this technology (testing periods, etc.). How could that affect adoption?

As automakers have the capabilities to add enhanced safety functionality or more environmentally friendly systems, might the government enforce strict regulations that require all new vehicles to be outfitted with said technology? And does that help automakers become more competitive, or does it inhibit their strategy by adding red tape? Does that benefit insurers more by potentially reducing losses due to collision claims, or raise premiums as those vehicles prove more costly to repair and replace?

If the government cracks down more on distracted driving, which has proven to be nearly as deadly as drunk driving, how will that affect the insurance industry? Currently, data compiled by The Zebra reveals that carriers are not penalizing texting while driving or phone use violations anywhere near the extent to which they’re penalizing DUI/DWI violations. Yet, the industry claims that fatalities are up because of distracted driving. Would they support government requiring phone makers to enact phone disabling when the owner is operating the car?

I realize I’m raising more questions than answering, but that’s the point. In the insurance industry, we welcome insurtech, and we need to foster its growth by engaging in these conversations as technology and other markets evolve.



Big North Carolina Obamacare insurer reduces rate-hike request, citing lower-than-expected medical costs

North Carolina’s biggest Obamacare insurer on Wednesday sharply cut its request to raise health plan prices next year, asking regulators for a 14.1 percent average hike instead of its original 22.9 percent request.

Blue Cross Blue Shield of North Carolina said the lower requested rate for monthly premiums reflected the fact that it recently has “gotten a better handle” on expected medical costs from its individual health plan customers, making it easier to estimate necessary prices for 2018.

But Blue Cross Blue Shield’s new rate-hike request is still 5.3 percentage points higher than it otherwise would have been if the Trump administration guaranteed insurers key federal payments that the administration repeatedly has threatened to end.

Blue Cross Blue Shield covers about 500,000 Obamacare customers in North Carolina. Its original rate request for 2018 plans was made in late May.

Since then, the insurer said in a statement posted on its website Thursday, “The individual market in North Carolina has become less volatile.”

“Put simply, we got information in June and July that made us confident we could reduce our requested rate increase for 2018,” wrote Brian Tajlili, the insurer’s director of actuarial and pricing services.

Tajlili noted that Blue Cross Blue Shield adjusted its rate increases in each of the past three years “to take into account additional claims experience or new developments.”

“In a few of those years, the adjustment increased our rate request. This time, the adjustment is to reduce our request,” he wrote.

Tajliili said the insurer believed the new 14.1 percent request “will allow our [Obamacare] plans to be financially viable while being more affordable for our customers.”

But, he added, “there is still a great deal of uncertainty surrounding the law. Many customers, particularly those not receiving Federal subsidies, will face challenges affording any premium increase.”

The federal government currently reimburses Blue Cross Blue Shield and all other Obamacare insurers billions of dollars for discounts that the insurers are legally bound to give low- and middle-income Obamacare customers for their out-of-pocket health costs.

The Trump administration has threatened to end those payments. Experts have said the refusal of the administration and the Republican leadership of Congress to guarantee the payments could add 20 percent or more to premium price-hike requests for next year.


Cost of UK car insurance leaps 11% to record high

hanges to compensation rules and rise in insurance premium tax blamed, as drivers pay £484 on average for annual policy

The cost of car insurance has soared by 11%, nearly four times the rate of inflation, over the past year, taking the cost of motor cover to a record high.

UK drivers are paying an average £484 for an annual insurance policy, up£48 in the last 12 months, according to the Association of British Insurers. It laid much of the blame on changes to compensation rules and an increase in insurance premium tax.

The 11% increase is the biggest year-on-year rise since the ABI began tracking premiums for private cars in 2012.

The price paid for comprehensive motor insurance was £462 in the first quarter of 2017. It rose to £473 in April, £480 in May and £498 in June, an average of £484 over the the second quarter.

Analysis by consumer organisation Which?, which will be published on Thursday, found older drivers have been hit the hardest and that failing to shop around could cost motorists over 65 as much as £500 a year.

The ABI said the increase in premiums partly reflected a rise in insurance premium tax from 10% to 12% on 1 June. The tax, which is applied to 50m car, home and private medical insurance policies, has doubled since 2015.

Another reason is the government’s decision to drastically cut the discount rateused to calculate compensation payouts when people suffer serious injuries as a result of a car crash or medical negligence, for example. Insurers say this will “overcompensate” those hurt in car accidents. Personal injury lawyers, however, argue that victims of accidents have for years been undercompensated.

Which? also blames mounting repair costs as motorists pay the price for advances in technology. Repairs to cameras, sensors and other hi-tech features can run into thousands of pounds.

The ABI said car insurance premiums would climb further next January when most reinsurance renewals take place. The new discount rate will add to the costs insurance companies pay to offset their own losses, which the industry group said would inevitably feed through to the premiums insurers have to charge customers.

The ABI said its motor premium tracker was the only published measure of the actual premiums paid by customers, rather than quotes. It includes price reductions as a result of no claims discounts.

Huw Evans, the ABI’s director general, said: “This dramatic increase drives home how important it is the government press ahead with a new framework for the discount rate and call a stop to further hikes in insurance premium tax.

“The UK is one of the most competitive motor insurance markets in the world, but the unprecedented increase in claims costs is driving up prices to record levels. Most younger and older drivers are likely to face increases even higher than this, hurting people who can least afford it. Worryingly these increases are unlikely to be the end of the road if reinsurance premiums go up at the end of the year, adding further costs to insurers.”

Car insurance premiums
 Car insurance premiums Photograph: ABI

The ABI figures are published on the day of a House of Lords debate on the government’s decision in February to cut the personal injury discount rate from 2.5% to 0.75%, the lowest in any advanced economy.

In the first case settled under the new compensation rules for serious injuries in March, East Lancashire hospitals NHS trust had to almost triple its payout to a 10-year-old girl left with cerebral palsy to £9.3m.

Just after the discount rate change the Office for Budget Responsibility said the government now had to set aside an extra £1.2bn a year to meet the expected costs to the public sector – and it would push up car insurance premiums by about 10%.

Lord Hodgson, a member of the Lords secondary legislation scrutiny committee, has tabled a motion of regret for debate after the committee expressed dismay at a lack of an impact assessment.

But solicitors at Cartridges Law firm said: “The most seriously injured victims of accidents have, for many years, systematically been under compensated by a discount rate that was set artificially high.”

The Association of Personal Injury Lawyers added: “The way to ensure people with life-changing injuries receive the compensation they desperately need is to retain the current formula for calculating the discount rate.”



Insurance company Swinton to shut 84 branches and cut 900 jobs

Insurance company Swinton is shutting 84 high street branches and slashing 900 jobs as part of a major restructuring programme launched in response to changing consumer behaviour.

The company in a statement said that 90 per cent of its customers now buy insurance over the phone or online, implying that Swinton is facing the same challenge as high street banks that are increasingly underused amid a rise in online and mobile banking.

Swinton currently has 195 branches across the country.

“This change is difficult for all colleagues, especially those who are directly impacted by the proposals, but is vital if we are to remain competitive in a challenging insurance market,” chief executive Gilles Normand said in a statement.

“Ever since Swinton started selling insurance door to door 60 years ago, this business has always evolved – first via branches, then contact centres and increasingly online.

“Our approach today, which is based on a high contact strategy, no longer meets our customers’ need,” he said.

He added that branches continue to be an important part of the company’s “multi-channel business model” but that Swinton needs to ensure that it can interact with customers “whenever, and however, they choose”.

The company also said that it would be closing a contact centre in Norwich as part of the review.