With the sudden burst of technology and social networking, information on people in a number of areas has become transparent and public. Data-marketing has become a popular area of interest for many companies. Now insurance companies are looking into using data-mining to determine life insurance rates and risk factors for their customers. Companies, such as Aviva PLC, have done studies on this new “predictive modeling system”(Scism). Instead of using the traditional method of examining blood and urine samples, insurance companies are now looking at magazine subscriptions, online purchases, and social networking sites to determine risk factors for a customer.
Many companies have now implemented data-mining for marketing purposes, and now insurance companies are using this technology to determine risk factors. With this sudden burst of data-mining use, comes many questions of privacy. Companies are digging into people’s search histories to determine risk factors which could affect their insurance rates. Studies were performed to discover how data-mining has become so effective and intrusive. “The study found that the nation's 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning”(The Web’s). Many of these tracking devices allow companies to even discover what people are searching and writing in real time. One example on how companies are able to do track people this way is through the use of beacons or “web bugs.” These pieces of technology are stored as software on certain websites that allows information such as what was typed and the movement of the mouse of the user to be tracked and recorded and later sold.
However, with this new technology questions on accuracy and privacy are popular topics. How can insurance companies determine risks and insurance rates based on search histories and magazine subscriptions? Some people may search for information on eating disorders, however, they may be searching for someone they know and not for themselves. Although using personal information from data-mining will save the company money, it might not be the most reliable source to determine insurance rates. In addition, websites are installing these tracking devices on their users computers without their knowledge or consent (Scism). This growing concern for privacy has sparked many politicians to push for stronger laws to prohibit the using of these data tracking technologies. The Federal Trade Commission has recommended that lawmakers pass legislation for do-not-track features. Although no legislation has been passed yet, many companies, such as Google, allow their users to personally turn off any tracking technology there may be (Lawmaker).
Although I see many uses for data-mining especially for marketing purposes, I believe that it is an invasion of privacy. I especially believe insurance companies should not look at tracking information to determine insurance rates. The accuracy of the information they receive is questionable and people should not be punished through high insurance rates because of their online search history. I understand it is a cost effective method to determine insurance rates, but I feel that data-mining has become too intrusive and I support do-not-track features that may be implemented.
Works Cited
Angwin, Julia. "The Web's New Gold Mine: Your Secrets ." Wall Street Journal 30 Jul. 2010. Web. 21 Feb 2011.
Angwin, Julia. "Lawmaker Introduces New Privacy Bill." Wall Street Journal 11 Feb. 2011. Web. 21 Feb 2011.
Scism, Leslie. "Insurers Test Data Profiles to Identify Risky Clients ." Wall Street Journal 19 Nov. 2010. Web. 21 Feb 2011.
I agree with the idea that insurance companies cannot completely determine risks and further subject people to higher insurance rates based on search histories and magazine subscriptions. It would be highly unreasonable for an insurance company to deny coverage to someone based on the recent search history. If you are like me, there are some things that I don't tend on repeating searches for, but at some times are forced to look them up. These searches are completely used for data research, as you mention an eating disorder searches. Further, am I to be penalized for searching WebMD for my different symptoms or just for my own personal knowledge?
ReplyDeleteAll while this may be an invasion of privacy there are its benefits. For instance, the first article we read in class discussing Harrah's and their use of data mining. In that respect, finding out where a customer dines the most is not as intrusive because the goal is to reward the customer with comps to that place as a thank you for gambling.
All in all, I feel that it depends on the industry that I find data mining to be "too" intrusive. I feel it has its place in certain areas but not in others.