Social Networking’s Role In Measuring Terrorism Risk
The criticism of calculating terrorism risk was the perception that analysts could not predict human behavior. As it turns out, no one needed to. Social-networking analysis has been “very effective” since 9/11, [Gordon] Woo says, in foiling numerous terrorism attacks. In addition to its first priority of keeping America safe, the tactic has “protected insurers from paying large losses,” he adds.
It’s incredibly interesting that even bin Laden—a man who took great pains to avoid personal contact with social media and electronic networks in general—still wasn’t able to escape their reach.
If bin Laden can’t escape, who can?
Risk adapts
Risk has a way of changing and adapting to your risk management strategies. Risk is like water looking for the weak seam to flow through and produce a leak. Water is not being an evil conscious entity, that is just the nature water. And that is the nature of risk as well. It will adapt and change and will find the cracks in your risk management system.
Financial services industry still sending mixed signals about social media
Goldman Sachs has invested $450 million in Facebook, yet the social network is still blocked for Goldman employees.
(via Erik Qualman)
Financial institutions’ social media supply not meeting demand
A Fiserv white paper indicates that more than a third of financial institutions’ customers want to connect through social media (and nearly half of Gen Y do), but only 11% currently are.
The ‘What is an actuary song’
I’m a little late finding it myself, but here’s a promotional video for the actuarial field (via iii.org).
In my opinion, there are many potential uses for video media in the actuarial profession, and they go well beyond simply promoting the profession. For example, why not use YouTube videos to provide instruction for actuarial software?
It would be an ideal way to provide on-demand education and also allow the exchange of ideas in comment threads. It would also help relieve employers of the burden to train new employees on software. Use the web to let new hires train with others, and let them cheaply find answers to questions that may have already been asked.
FarmVille insurance
Not that long ago, I asked the question: What role will actuaries and risk analysts play in virtual economies?
I may get an answer much sooner than I expected. Insurance Journal reports that Farmers Insurance is now offering coverage in FarmVille, a “virtual world” game within Facebook:
When players place the Farmers Airship on their farm, they receive free “wither protection” for the crops on their virtual farm. In a nod to the security that Farmers Insurance offer its customers, this protection means players crops won’t wither for the 10 days of the promotion.
But if you’re an actuary that wants to start pricing virtual goods and services, I wouldn’t get too excited just yet. This first take appears to be mostly a marketing campaign – an effort to draw attention to the Farmers Facebook page.
But still, it’s a start.
Hat tip to Claude Penland for sharing a link to this story.
Actuaries and Web 2.0 in 2010
Risk 2.0 has been a little quiet lately. I’ve been immersed in several projects. One of them just culminated in a trip to New York City to attend the 2010 Society of Actuaries Annual Meeting.
I was part of a panel that presented a session called “The Actuarial Technology Perfect Storm.” In the session, we discussed a model for creating a better working relationship between actuaries and IT professionals. Our goal was to point out that while a disintegrated actuarial-IT structure may work okay today, it’s not sustainable given the rapidly changing technological demands on actuarial work.
Our findings were based on a survey of actuaries that we’ve conducted the past three years. In 2009, we introduced a question on Web 2.0. The question asked respondents to indicate their awareness and implementation of seven Web 2.0 technologies:
- Crowdsourcing
- Social Networks
- Dynamic Documentation
- Wikis
- Instant Messaging
- Collaborative Product/ Service Design
- Blogs
Awareness and implementation increased across the board in 2010. However, it’s clear that actuaries are still very much in a discovery phase with Web 2.0.
Instant messaging, blogs, and social networks were the most recognized Web 2.0 technologies in the survey. Roughly 90% of respondents had heard of each of them. They were also among the most highly implemented to date. 30% had implemented instant messaging, 11% blogs, and 8% social networks.
In my mind, the Web 2.0 tool that would provide the biggest immediate benefit to actuaries is the wiki, which is an ideal way to openly store documentation and procedures for easy access. Wikis were recognized by 73% of actuaries in 2010 (a healthy increase of 16% over 2009). But only 10% had implemented a wiki in their work.
If you’ve implemented any of these technologies or want to know more about them, let me know.
Risk 2.0 – The week in links 9/24/2010
- What’s Facebook worth? Some valuations now put it ahead of big names like RIM, Starbucks, Dell, Yahoo, and others.
- Hadyn Shaughnessy discusses semantic clustering and illustrates how it can be used to form a high-level picture of Web 2.0 conversations. It looks like a case of ecosystems talking about ecosystems.
- Chris F. Masse, vigilant prediction market blogger, thinks that they may be not be that useful for solving real world problems.
- Rob Koplowitz talks about how social technologies can kickstart innovation and the trend toward Enterprise 2.0:
This shift toward increased collaboration is apparent, even as enterprises emerge from the economic downturn. In fact, 65% of organizations now support at least one Web 2.0 technology for internal or external collaboration and communication purposes.
- Riva Richmond of the WSJ lists three ways companies can use location-based social media. To date, I haven’t heard about any insurers, banks, or other regulated financial institutions using this type of social media. (If you have, let me know.)
- Varadharajan Krishnamoorthy lists some good information and links for insurers interested in social media.
- The perils of tweeting away from the nest continue to get attention. One UK insurer recently issued a warning to customers that they may be increasing their risks of being robbed if they announce their absence from home on social networks. Time will tell if these warning shots are followed by premium hikes.
James Surowiecki on social intelligence
If you have any interest at all in social networking and crowd intelligence I highly recommend reading The Wisdom of the Crowds by James Surowiecki. It’s a great book, and I think it will eventually be regarded as a seminal work in realm of social network intelligence.
Recently, I came across a TED talk that James gave in 2005 following the famous tsunami that hit near Sri Lanka:
What follows is an outline of the thoughts and questions this talk provoked in my mind.
The upside of the social web
- Blogs and social networks are filling an important role in telling the real story following a disasters.
- Can social networks be used to assess risk and forecast disaster?
- Blogs and social networks are accessing a previously untapped form of collective intelligence.
- Social networks are driven by the power of voluntary cooperation.
- A striking economic irrationality exists with blogging. Most do it for free. How can the internet do such a good job of distributing information resources without the aid of a conventional currency? Is this a new economic model?
- What is the value of reputational capital? Can it be priced? Traded? Borrowed against?
- Groups of people consistently make better guesses than individuals. How can groups be used in forecasting?
- How useful are blog comments as a crowd intelligence tool?
- What effect do networks have on the behavior of investors, policyholders, financial institutions?
- Can the stock market guide us in analyzing social network activity?
The downside to the social web
- The more tightly linked we become, the harder it is to maintain independence.
- The meme problem: Networks begin to shape your views by driving attention to things the network values. Memes can drive your personal decisions. Memes create dependence. Groups are only smart when members are highly independent.
- Don’t be like ants, who sometimes get stuck in a “follow the one in front of me” mode. Don’t march in a circle. Don’t stop diversifying out of your existing network.
Feel free to share your own thoughts and questions in the comments.
Risk 2.0 – The week in links 9/17/2010
- If you view all social media users as the same, you may want to rethink that. Terri Goveia discusses the concept of “connectors.” These are highly influential individuals whose actions shape the decisions of nearly three quarters of the consumer population. Finding them in social networks is probably a good idea.
- It can be hard to sell anything new to the C-suite. Social media author and expert Erik Qualman lists 3 reasons CEOs hate social media, but he also provides 3 reasons they can learn to love it.
- Nicholas D. Evans of Computerworld provides a thorough explanation of social computing’s evolution in the enterprise.
- John Hagel III and John Seely Brown outline six fundamental shifts in the way we work. I think social media and collaborative technologies will provide the foundation for significant changes in the workplace in the coming decades.
The collaboration curve helps explain the rise of network-centric efforts ranging from open source software development to “crowdsourcing” to “creation spaces.” In nearly all of these group efforts, rapid leaps in performance improvement arise as participants get better faster by working with others.
A new study from Pew Internet found that between April 2009 and May 2010, social networking site usage grew 88% among Internet users aged 55-64, and the 65 and older group’s social networking presence grew 100% in the same time frame.
- Ted Schadler wrote a very interesting piece on IT in the age of the empowered employee. I think IT is now faced with an immense challenge in the typical enterprise. They have to take on the role of security guard, mechanic, and increasingly they have to identify when it’s in the company’s best interests to stay hands off. In my view, the world of IT is becoming more complex because technology is no longer just another “department” or “tool” in the business. It’s everything, and it’s everywhere. It’s work; it’s play; it’s communication. All these things are blurring into one thing: life.
- In a must-read piece over at The Institute for the Future, Bradley Kreit talks about (and lists many examples of) how social network activity can be used to gauge mood. The marketing and insurance implications are surely vast.
It’s enough to imagine the sort of future where a pharmaceutical company’s algorithms can read through your Outlook calendar, notice no one accepts your meetings, sees your Facebook status updates seem to indicate a level of frustration, and sends you an offer for a free sample of the latest anti-depressant.
- It’s official. Announcing that you’re not home on Facebook will get you robbed – at least in the state of New Hampshire.
- Still think Twitter is a fad? Check out the latest growth chart. 90 million tweets per day. It’s getting loud out there. Are you listening?
