Blog

Facebook blocks social media algorithm to calculate quotes

Facebook has blocked plans by a UK car insurer to use big data analytics to calculate quotes for customers based partly on information gathered from their social media postings.

Admiral unveiled the opt-in solution, called firstcarquote, that was intended to analyse the Facebook accounts of first-time drivers in order to identify personality traits that could be an indicator of how safe a driver they are likely to be, the Guardian reported. 

However, the social network has since refused permission for Admiral to proceed, as it was found to be in breach of the site's guidelines on how companies should use such information.

Admiral planned to scrape data from users' status updates and likes, with the company claiming it could lead to discounts of up to 15 per cent being offered to individuals identified as lower risk. Admiral also added that it will not be used to apply financial penalties to those deemed to be less safe, and no quotes will be offered that are higher than if the tool was not used.

The Guardian explained the algorithm would look favourably on posts that indicate users are conscientious and well-organised. For example, if a user uses short, concrete sentences, or arranges to meet friends at a specific time and place rather than just "later", these will be seen as positives.

On the other hand, overuse of exclamation points and words such as "always" and "never" may be taken as indications a driver is overconfident and could count against them.

The service was another example of how the insurance industry is looking to apply advanced big data analytics solutions to its decision-making, and take advantage of capabilities that allow it to gather and review very large sets of unstructured data, such as social media postings.

However, Facebook's rejection of the plans may serve as a reminder to businesses that they must take extreme care when using personal information as part of their big data analytics developments.

In explaining why it has blocked the firstcarquote project, a spokesman for Facebook said: "Protecting the privacy of the people on Facebook is of utmost importance to us. We have clear guidelines that prevent information being obtained from Facebook from being used to make decisions about eligibility."

Before Facebook blocked the service, leader of the firstcarquote project at Admiral Dan Miles sought to reassure those who may have privacy concerns, telling the Guardian: "It is incredibly transparent. If you don't want to use it in a quote then you don’t have to."

He added that the algorithm was "very much a test product" for the company as it seeks to explore the potential of what big data analytics can offer to the industry – as well as what its customers are prepared to accept in order to get lower quotes.