FreshNetworks Blog

Image courtesy of Ernst & Young

In a recent report,  Ernst and Young lookedspecifically at how social media be used in the insurance customer value chain.

Here’s a summary of the findings, with some of our own thoughts:

1. Research products

Customers are using dedicated price comparison sites in order to research insurance products. They’re also asking questions, through social media, to their connections and friends, seeking advice on things like the best car insurance company, or where to get the best deal.

Our suggestion: Insurance companies should use social media monitoring to listen to these conversation and find out what’s being said about their products. This will help to assess both the positive and negative perceptions behind the products and how this influences the research stage of the customer value chain. If they’re not being talked about perhaps this is an indicator that marketing and promotional activites need to be reassessd.

It may also be appropriate for some brands to establish Twitter and Facebook profiles in order to respond to the requests through social networks for more information about where to get the best car insurance etc. However this should be assessed on a brand by brand, interaction by interaction basis as some customers may resent hearing back directly from a brand and will see it as a hard sell.

2. Obtain quotes

Some insurers are using new technology, like iphone apps, to generate, buy and renew insurance quotes. An online research company targeting advisers has developed the country’s first app for life insurance quotes.

Our suggestion: Mobile device use is on the increase and insurers would do well to think about how they can enable their current and prospective customers to access price and data information  on the go. This could be particularly valuable for travel and car insurance companies.

3. Policy buying

According to Ernst and Young’s industry research, 90% of customers say peer recommendations are the most credible form of advertising.

Our suggestion: Reviews and recommendations from “people like me” play an integral part in the customer decision making process. A good review by an influential blogger, or a comment by a social media influencer who appeals to the consumer audience can be more valuable than thousands of pounds worth of advertising. By interacting and engaging with influencers, brands can build up their presence and appeal to their target audience.

4. Service policy

Social media allows insurers to interact and communicate with customers, and vice versa. This helps the insurer learn more about their customer’s needs and helps them educate about the best policies, the benefits of their current policies etc.

Our suggestion: Insurance companies need to assess the best way for engaging with their market and audience. The best way to do this is to come up with a social media management plan and a content strategy that is personalised, useful, relevant and targeted.

5. Lodge claim

Many insurers are building and piloting new applications to capitalise on the prevalence of mobile and app based communication to deliver information to claims handlers and policy holders. They’re also offering self-service portals where claims can be lodged quickly and effectively.

Our suggestion: Social media can help to disseminate useful information that could help to reduce claims. For example, travel insurers could provide useful advice about keeping valuables safe in hostile environments or extreme weather conditions. Claim handlers could also mine Facebook, Twitter and other social networks to assess the legitimacy of claims based on the data, comments and conversations of the claimant.

6. Renewal/Terminate policy

Customers mostly turn to websites to fulfill their renewal and termination needs, thus the same potential exists for insurers to use social media as a means to improve renewal numbers.

Our suggestion: One of the main benefits of social media is the potential to gather valuable CRM data. For the insurance industry this could be information like  renewal dates, policy types etc. If this information is gathered then engagement could revolve around not only acquiring new customers, but targeting them before their renewal date to encourage them to renew the policy, or change to a different one, rather than terminate.

At 3pm GMT on 17th Feburary, Charlie Osmond will be giving a webinar about social media and the financial services sector.

Hosted by Val-Pierre Genton from BrightTALK, Charlie will speak about developing a social media strategy and will give tips and advice on measuring and tracking ROI.

If you would like to attend the webinar visit this blog post and click on the “Attend” button at 3pm GMT on 17th Feb.

While  niche communities, customer driven markets and transparency are all areas in need of exploration, when it comes to social media for financial services the main concerns highlighted during our financial services round table event were  risk and regulation and resourcing.

The current situation

From our round table discussion it became apparent that some financial services brands don’t see a place for social media within their organisation, therefore they don’t see the need to resource it.

One of the discussion points raised at the event was that internal staff, from the top level down, often see social media as something they use to interact with people outside of work in their private life – it has no place in the office. This makes it difficult to get both resource and budget to implement an effective social media strategy as often senior level staff do not see the value for their business.

However, on the flip side, several budget holders in the room argued that it is possible to get both money and resource for social media – you just have to prove it has value. Take Aviva’s “you are the big picture” campaign, or one of our clients, LV= and their online community.  These companies both allocated funding and resource to social media.

Delegates at our round table event felt that the best approach to getting sign-off for social media is to pick out a single key business aim– perhaps the lowest hanging fruit- and test how well social media can achieve this goal. Prove one basic goal and then move on from there.

If social media is really here to stay then going slow now won’t make a difference in the long run, and it will prove to seniors and budget holders that time and resource is needed to achieve real success from social media.

To a lot of key decision makers social media is still the unknown. By breaking it down into bite size pieces you can prove its value.

The future direction

An interesting thing to note about our roundtable discussion is that the conversation focused largely around social media tools – namely Twitter and Facebook.

Perhaps it’s time for financial services brands need to think outside of these tools and to look at resourcing a more long-term sustainable social media strategy that engages the business at all levels. Organisations need to learn not to rely on the current, most popular or commonly used social media tools; they may not be around in five years time.

In order for social media to succeed it must be driven from the top down, not from a single resource within the business. Rather than using social media just as part of marketing, or customer service, or product innovation, it needs to be integrated throughout the whole business. In the future, staff and employees in all departments will need to be trained on how to use social media to ensure that rules and regulations are not broken and that social media becomes a seamless, intrinsic part of business.

Aside from niche communities,  customer driven markets and transparency, risk and regulation was one of the key discussion points at our social media in financial services round table event.

The current situation

Initially financial services brands and institutions were reluctant to use the various social media tools and technologies available on the market, largely because of the stringent rules and regulations that govern the industry.

Financial services brands have strict codes of conduct when it comes to data sharing. It’s often the case that external sites like Facebook and Twitter simply cannot be used or accessed within the firewall of a business for fear of information inadvertently being leaked out.

With the Financial Services Authority (FSA)  asking firms to apply strict advertising rules to more informal communications like Twitter, forums and blog posts in order to stay compliant, it’s no wonder financial services brands are less keen to adopt new technologies – it’s just another area they can fall down on.

However, with large banks and institutions like  American Express, ING Direct,  Bank of America and HSBC all using social media in one way or another, it seems that financial services brands are starting to  realise they can use social media as long as the activity is well planned and uses a pre-defined, fully developed social media strategy to ensure that risk is managed effectively and that regulations are adhered to.

What does the future hold?

With more and more financial services organisations adopting social media it will become an inherent part of the industry’s online infrastructure. As long as businesses have a pre-defined, robust social media strategy, with clear processes in place, then both FSA regulations and other guidelines will remain intact.

Proactive identification of compliance and the possible business risks from online conversations will also help financial services brands use social media in a way that aligns with industry standards.

Similarly, each business should develop a social media policy for employees. The policy should form a  standard part of all employment charters and contracts and should determine social media activity  both internally and when representing the company externally. Again, this will ensure that rules and regulations are not broken. This policy should be updated on a regular basis to keep in-line with changes to the social media landscape.

Our next post will look at resourcing social media in financial services businesses.

When I head out to conferences and seminars, the value for me often is not so much in the content of the event itself, but more with the surprising people you meet and their great stories and anecdotes about social media.

One such person that I met was Roberto Hortal Munoz, the eBusiness Director for RSA Emerging Markets.  He has a great interest in social media for financial services and over a brief lunchtime chat he told me about Poland’s first financial services social networking game, “National Driving Test”, that was created by  Link4 – part of the RSA group and the market leader for direct insurance in Poland.

RSA’s National Driving Test game was launched in February this year on Poland’s equivalent of Facebook, Nasza-Klasa. Nasza-Klasa has 14 million active members and 16 million online users.

The Driving Test  game works by asking players 10 questions about driving habits and their knowledge of  car insurance. Players are allocated a driver profile depending on the response to their question. The six different driver profiles are inspired by, and aligned to, RSA’s consumer segmentation. The driver profile badge is displayed on their page for all their friends to see:

Depending on the player’s answers at the end of the game the player is then directed to relevant, targeted RSA insurance product information that relates to the answers they have given during the game.

So in a fun, engaging way the game serves to highlight the benefits of Link4′s driving insurance.  It’s obviously working as Link4′s  social driving game has achieved some great headline results, including 10,000  users requesting an insurance quote during the first seven days of going live.

You can read more about the campaign, as well as find more information about Roberto Hortal Munoz, on his blog at www.hortal.com.

Interested in social media case studies? Want to get practical advice about corporate social media use?

Why not attend the Corporate Social Media Summit Europe on 17th -18th November 2010 in London and get exclusive insights into how brands like Vodafone, Cadbury’s and Nokia are using social media for real business benefits.