Social media, as a catalyst for efficient communication and interaction among people, is a natural ally for helping insurance companies improve their business and connect with customers. For example, social media makes it more convenient, faster and simpler for insurance consumers to obtain advice from friends, family, and even strangers about the best insurance products or carrier.
Carriers have a tremendous opportunity to capitalize on the word of mouth that is increasingly occurring within social media. Nearly half (48 percent) of the 6,000 insurance customers from 11 countries participating in Accenture’s 2013 Consumer-Driven Innovation Survey said they would consider comments on social media in making their insurance-buying decisions. The survey found that in particular younger consumers, ages 18 to 34, pay attention to social media comments and recommendations.
Social media also provides a rich set of data on consumers and increasingly the “things” that they own or use. Social media is expanding the universe of data that is knowable about consumers, their behaviors, and their possessions. Historically, insurance companies have found ways to capitalize on such an information advantage to better price risks and avoid adverse selection.
Additionally, many consumers want insurers to play a more active role in risk management–which requires insurers to be more in tune with their customers’ daily lives. In Accenture’s 2013 Consumer-Driven Innovation Survey, fully 92 percent of respondents saw risk management advice as either a “good” or “critical” service desired from their insurance provider. Given the relative infrequency of contact between consumer, agent, and insurer through traditional channels, social media data can help fill in the gaps.
Finally, in the same consumer survey, 80 percent of respondents saw personalized advice from their insurance carrier as either “somewhat” or “very” important. Social data is rich with life events and other information that can aid agents and insurers in providing more personalized and relevant experiences and offers. While many carriers have embraced social media to varying degrees, their efforts have been primarily focused on social listening and engagement. No carrier has yet realized the full, transformative power of social media.
In this report, Accenture explores the applications of social media—from conventional to disruptive—across the insurance value chain and suggests a framework for insurers to mature their social media efforts to drive more business value. Industry’s social media use focused largely on marketing
Despite the natural fit of social media to the entire insurance business, insurers are applying social media primarily to marketing, public relations and servicing. Findings from a recent Accenture Insurance North America Social Media Benchmark Study show that the clear majority of brand posts relate either to marketing/sales or customer experience (Figure 1). Within Customer Experience, the majority of posts pertain to claims and billing/pricing issues. News sharing and philanthropy round out the categories of topics customers tend to post about most often.
Such application of social media in the brand-conscious, relationship-driven insurance business is warranted, and carriers continue working to:
- Build trust in and rejuvenate their brands. For example, Farmers Insurance sells virtual insurance for farmers against crop withering in the popular FarmvilleTM Facebook game, creating brand awareness among young consumers and injecting a dose of dynamism and innovation into the brand.
- Design and execute marketing campaigns. Brand icons and passion pages, such as Progressive’s Flo, Allstate’s Mayhem and New York Life’s Keep Good Going, demonstrate highly efficient use of social media to keep target audiences engaged. In the Accenture Insurance 2014 North America Social Media Benchmark Study, New York Life ranked highest in the number of Twitter followers; Mayhem scored highest in Facebook engagement efficiency and ranked in the top three for Twitter followers; Flo is top-rated in Facebook reach at nearly 6 million fans.
- Extend their brands beyond insurance through social communities. New York Life’s childhood bereavement chats on Twitter and USAA’s community for spouses of military personnel deployed overseas are good examples of social communities that provide value to customers beyond traditional insurance. In the broader financial services space, American Express brings value to small business owners with its Open Forum, an advice-sharing platform that connects the expertise of its members via online and social media channels; the Facebook page has more than 340,000 Likes, and the Twitter feed has amassed 200,000 followers since 2011.
- Generate leads. As consumers freely share their life events on social media forums, it is possible to use listening tools and analytics techniques to identify emerging needs for both prospects and existing customers, and present relevant offers.
- Protect their brands through sentiment analysis. Many carriers actively listen to and analyze consumer comments on social media networks, enabling them to timely address potentially damaging comments from unhappy, disgruntled customers.
Insurers have clearly embraced social media channels as an integral part of their media mix and use them extensively to listen to and engage with their customers and prospects.
Where else along the value chain can social media be utilized?
Beyond marketing activities, insurers can effectively apply social media across every aspect of the insurance value chain to help improve the way they conduct and grow business (Figure 2). For example:
Social media networks and communities should be used not only to gather insights on emerging/trending customer needs, driving new product development, but also to test new products before rolling them out at scale. A majority (55 percent) of respondents to Accenture’s 2013 Consumer-Driven Innovation Survey indicated they would use one or more of a variety of prospective insurance services offered through social media.[i]
Social media networks have an obvious application in extending and reinforcing agents’ offline networking efforts. Much in the same way as people use Facebook and LinkedIn to keep in touch with family, friends and business associates, agents should utilize social media to not only engage and stay connected with customers and prospects but to also grow sales and to gain customer insight to inform account rounding tactics.
One social platform that is helping agents establish and enhance customer relationships is Hearsay Social®. Hearsay is a social media marketing and management platform that enables brand- and regulatory-compliant content to be distributed to agents, to use in their social conversations. The platform aids in achieving compliance across networks of thousands of agents and facilitates the sharing of best practices for success.
Pricing and underwriting
One of the latest trends in the online/social media space is the so-called sharing economy, where owners and renters connect through digital technology. Today consumers can rent anything from castles to Cadillacs to hedge clippers. This poses interesting questions for carriers: how does offering one’s car for rent for a day or a few hours change the risk profile of that car’s owner? How should this be priced? Whose policy is providing primary coverage?
Social media data can also be applied toward enriching a prospect’s profile. For example, an avid scuba diver or bungee jumper is likely to have a different risk profile than a computer engineer who spends most of his free time reading, which may or may not suggest policy changes. Lenders are beginning to use ratings on eBay to make loan decisions for small businesses. Could similar data be useful to carriers?
Major carriers already provide customer service via social media channels, including Facebook and Twitter. Through these and other networks, carriers can listen for and identify their customers’ requests for and comments on related services. Then, insurers can engage with those customers through more direct channels and address their concerns in a timely manner. This process is often referred to as “social care.” Consumers that have a positive social care experience are nearly three times more likely to recommend a brand to others.[ii] Nearly 40 percent of companies experience a 10 percent reduction in support costs from implementing social care, with greater customer satisfaction.[iii]