Analysis: Insurers' embrace of social media

Analysis: Insurers' embrace of social media

When a young international property broker at Willis quit to set up a small insurance networking platform aimed at graduates he didn't anticipate the 2,000 member sign-up that surged in over the next 12 months.

"The insurance industry revolves so much around networking," says Alex Hearn, the founder of MySlipcase. "Our target was 1,200 people and two organisations. We have actually got five organisations and just under 2,000 sign-ups."

The insurance and reinsurance platform, http://myslipcase.co.uk, went live on May 22 last year. Since then Hearn has already seen big changes in the insurance industry's attitude to social media.

For example, Willis recently created an internal social network used to crowd source answers to industry and product-related questions. It's still in its early stages, but its social features are being built out this year, says Julie Roth, Willis' director of digital marketing and communications. The broker's external blog, WillisWire, also gets around 10,000 page views a month.

Gartner, a US-based IT research and advisory company, surveyed 62 North American property/casualty and life insurers. It found only 42% of North American property/casualty insurers participated in social media in 2011, with a further 19% saying they planned to participate in 2012. In contrast, 61% of North American life insurers participated in 2011 and 16% planned to participate in 2012, the survey shows.

Kimberly Harris-Ferrante, Gartner vice-president and analyst, said: "The survey findings indicate a perception that social media is more suited for property/casualty insurers due to the commoditised nature of the business. There is a higher rate of social media adoption among life insurers, which is very likely the result of social media usage with agents and distribution networks, more so than with consumers."

Tom Johansmeyer, the director of marketing at Verisk Insurance Solutions, Claims and Crime Analytics, which includes PCS and theISO Claim Search database, said in 2008 marketers saw social media as a business-to-consumer tool rather than business to business. "Now, perception has changed in insurance and people see blogging as more of a business to business play than for the consumer," he says.

MySlipcase has signed up members from 342 insurance and reinsurance organisations in 38 countries. Willis, Liberty Syndicates, BMS, the British Insurance Brokers' Association (Biba), Catlin, Liberty Syndicate and Willis are the first to take up unique company pages on the site. Of the individual members, 70% are from the London Market, 25% from New York and Bermuda, and the remainder from other parts of the world. 

Kiln is looking into joining MySlipCase as an organisation. Roger Bickmore, group business development director at Kiln, says: "If MySlipcase takes off it could be fantastic."

In the summer of 2012 Kiln decided to grow its social media. "We recognised that the insurance industry hasn't really developed a full presence in social media.  We saw it as a good area for Kiln to distinguish itself and lead the market to a certain extent. We will be establishing a corporate approach to social media next week," says Bickmore. He started an industry blog himself in 2012 and while at first he was on a steep learning curve, "it is extraordinary how many people I have made contact with".

Of Gartner's property/casualty respondents, 95% said they would use social media for brand awareness, 73% for employee and agent recruitment improvements and 64% for competitive intelligence. However, Gartner argues that insurers should use social media in fraud investigation for product lines such as disability, bodily injury or workers' compensation. "Few insurers have embraced it and realised the benefit potential in these uses," the firm said.

An example of how social media could potentially help identify fraud came when ABC News recently reported US employer Johnson's Warehouse Showroom was appealing a workers'compensation claim in 2012. The employee claimed extra compensation for being in "excruciating pain," but posted pictures of himself on Facebook partying until the small hours.

Gartner's survey reports only 59% of insurers using social media for product and customer intelligence, 55% for revenue growth, 36% for reduced operational and communication costs and only 36% that would use it for loss reduction through fraud management or process improvements. A further 5% said they didn't know what benefits social media offered them.

Insurers' approach to social media has certainly changed over the past five years, says Johansmeyer. "The insurance industry has come a long way but I think there is still a lot more potential."

Johansmeyer says that while a written blog should be central to an insurer's social "environment", he has started to see great value in video blogs and advertising on sites such as YouTube, LinkedIn and MySlipcase. While YouTube has created the highest overall business click-throughs, MySlipCase enquiries have the highest conversation rate.

"There was too much rubbish on other platforms," says Hearn at MySlipcase, "so we decided to verify users, filtering out people who aren't insurance or reinsurance related such as recruitment consultants. This was really tough at first but we have really seen the benefit of it in the last 12 months. It's not a scattered gun type approach, like LinkedIn, as companies can see exactly who is reading their material and send out messages to their target audience. HR departments can also shortlist people who are a certain age with a certain speciality."

The site is twice the size it was three months ago, and Hearn says it will be double the size again in three months. When Hearn started he thought only graduates would sign up but the average age is 38. One in 20 members is at the top senior level, he says.

There are still not enough insurance practitioners on social media to optimise platforms though, Kiln's Bickmore argues. "We thought about using Twitter to communicate to brokers things like when we will be at the books, but not enough of them are on Twitter for it to work yet," he says.

Roth at Willis says the industry is at beginning of the industry's adoption of social media, which is complementing the industry rather than causing a tectonic shift. "As the industry gets to grips with it, I think that the use of social media, particularly through the use of mobile technology, will increase, especially in the direct insurance market as a vehicle for communication between policy holders and their insurers," she says.

Roth has seen one or two apps for making claims from insurers. "But most usage I'm seeing in social, claims-wise, is just getting word out about how to file or whom to call for example." Aviva has launched a "MyClaims" car insurance claim app for iPhones. The app has a GPS locator and allows customers to take a picture of any damage and collect witness and third-party audio statements. Liberty Mutual has a similar app for auto and home claims. 

Almost half (49%) of insurance and reinsurance executives said over the next 12 months they expect to increase their use of apps in order to consume their information requirements, according to a recent independent readership survey produced by Fusion Communications on behalf of Reactions.

Reactions is launching its own iPad app to complement its popular LinkedIn and Twitter pages along with a newly-launched Facebook page. The app includes a range of features such as free digital downloads of the magazine, video and audio features, an internal browser to view website links. The Reactions LinkedIn page is also witnessing a 48% week over week growth rate and the Twitter page now has over 3,000 followers.

Organisations such as Lloyd's and Willis have also launched successful Facebook pages, despite some industry beliefs that Facebook isn't for business. Lloyd's has more than 2,000 "likes" and Willis has more than 1,000.

Both firms have taken a marketing approach to Facebook that has a younger and friendlier feel than LinkedIn or Twitter. Roth at Willis explains: "We feel our Facebook followers are more like Willis employees and friends. That's why our Facebook cover photo is a collage of Willis Associates from around the world - like a family photo, if you will. We share as many lighter things there as we can: the photo out our New York office window of the Space Shuttle being tugged up the Hudson River, the photo out our London office window of the Olympic rings hanging from London Bridge, video from our Nashville office's philanthropic endeavour."

By Vicky Beckett - vbeckett@euromoneyplc.com

You can follow Vicky on Twittter at https://twitter.com/reactions_vicky

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