Do insurance companies fear social media?

by Phil Mennie

Posted on 18 Dec 2015 at 12:05 pm

How engaged would you say that your policy holders are with your company? As a policyholder myself, my guess is that you would reply “not very”. Typically, there are annual touchpoints with your customers when renewing their insurance policies or when they make a claim. As insurers look to cross-sell products to their customers, having engaged and trusting customers will make it far easier.

In our digital, always-connected world, digital is transforming many industries. The insurance industry needs to work harder to ensure that they are not left behind. According to a recent YouGov poll, 62% of people want to buy basic day-to-day cover via smartphones, yet the “tedious” process of completing forms on mobiles devices meant that only 9% of respondents were using them for insurance purposes.

Social media may be the answer to increasing engagement with your customers. Social media is about two-way interaction. It’s not a channel to broadcast pre-approved marketing. Social media has the potential to be the thing that puts a face to a somewhat faceless organisation.

In my view, trust is the most valuable commodity for insurers. I think the reason for this is the lack of “face time” that insurance companies have with their insurer. My bet is that most policyholders’ only interaction with the insurer is when they see their premium being collected from their banks on a monthly basis. The hope for all policyholders, of course, is that they never need to make a claim on their insurance. But this lack of interaction with the insurance company can lead to a lack of trust. Especially if the insurer has faced negative press recently.

Many companies and brands have built strong social media followings and are gaining competitive advantage. Yet, many insurers seem cautious about taking the leap into the social media realm. Often the fear factor kicks in: How do we launch a social media programme for customer engagement? How would risk and compliance feel about it? What if our employees start posting silly messages online?

It’s possible to build a powerful social media programme which gains real, tangible competitive advantage for the companies that do it well. I reject the idea that it’s too difficult for regulated industries.

To make a social media programme succeed in the insurance industry you need to implement good governance around it. Good governance is about implementing and embedding an operating model for social media which enables you to get the most out of your investment while managing the associated risks of social media. And staying compliant, of course! What’s more, when governance works well it will actually bring internal teams together and align them to a common goal.

At a high-level, an effective social media governance programme will cover the following areas:

  • Social media policy – a positive document that enables people within your organisation to use social media effectively, rather than a document that strikes fear into its readers.
  • Governance and oversight – Clear working groups and formal interaction between teams with appropriate oversight, monitoring and performance reporting.
  • Crisis management – As insurers, you’re more than aware that the unexpected sometimes happens. Plan for it in advance, implement the plans and procedures which will see you through a social media crisis when times get tough.
  • Regulatory compliance – what regulations do you need to be aware of when engaging in social media and how does the dynamic change from advertising to customer support across the globe?
  • Strategy – What is it you’re trying to achieve from social media and how are you going to go about achieving it?
  • Training and awareness – Training that covers how to use social media to support the business’s goals, not just to outline what's acceptable and what’s not.
  • Cyber security and data privacy – a threat to all organisations nowadays. An appropriate level of control is needed to protect insurers from becoming the victims of a cyber-attack. Insurers should also consider the data they are going to capture and how are they are going to use it.

If you’re considering how to improve engagement with your customersor launch a social media programme, you can use the high-level framework above to start considering how to implement good governance around your social media programme.

For a more in-depth look at social media risk and governance, read my new book, "Social Media Risk and Governance: Managing Enterprise Risk".

What else do you think insurers should do when launching a social media programme around customer engagement?

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Social Media Risk and Governance: Managing Enterprise Risk

By Phil Mennie

Kogan Page; 1 edition (3 Oct. 2015)