Editors' Cuts

Social Media: Boon or Burden?

Pat Speer
Insurance Experts' Forum, May 5, 2011

There is no ignoring the growing influence of the social media channel. In fact, its mass appeal is now a visible force, garnering attention well beyond that given traditional networks, such as television, radio and even email. Consider last week’s victory rallies around the Capitol building in Washington and at Ground Zero in New York, as viral messaging using social networks spread the word of Osama Bin Laden’s death.

Insurers are discovering that the power behind social networking can work for them—and against them, noted Karen Furtado, partner at Strategy Meets Action (SMA). Furtado shared her comments at Duck Creek’s “Channeling Energies” conference held this week in Asheville, N.C.

“We are living through a series of changing events,” she said, “and social media does not come without challenges and risk. Insurers undertaking this medium must do so carefully, and with the end result in mind. What do we want to accomplish and how can we do this in the safest, most controlled way possible?”

Furtado offered attendees a look at what SMA terms an “ecosystem,” which comprises the blogosphere, social networking sites, multi-media, entertainment and virtual world offerings currently available to insurers.

“Each has its benefits, and each has certain challenges associated with it,” she said.

As insurers investigate internal and external social networking opportunities, they face a distinct challenge in terms of corporate culture—who owns the initiative? “Insurers need to understand, based on primary goals, who will take responsibility for its development and upkeep,” Furtado added. “Should this fall to the HR department? To Marketing? Or should IT take ownership?”

Other challenges include legal exposure, the lack of control over the message (i.e., customer service complaints are registered on the site for all to see), and a basic perception that employees who use social media during working hours are loafing.

“The opposite here could be true,” points out Furtado. “The employee may be verifying leads, investigating background claims information for a special investigative unit, or doing market intelligence work.”

For all the challenges insurers are experiencing, the opportunities are almost endless, added Furtado, who provided as examples: customer/agent engagement, referral leads, customer service improvements and branding.

Operationally, more and more insurers are evolving their claims operations to include social networking—not necessarily for purposes of “spying” on the claimant, but to create a high touch, proactive communication environment for the claimant.

“Consider a property/casualty carrier who uses Facebook and Twitter to broadcast evacuation messages about an impending disaster,” she said. “This is where the strength of the technology shines.”

By using social media sites to actively engage the customer, such as an instant chat opportunity to those visiting the site, insurers may also ultimately reduce the number of active call centers currently employed, Furtado said.

The keys to the social media kingdom, however, lay in “planning your work and working your plan.”

Before undertaking social media projects, Furtado recommends that carriers create a clear definition of key objectives, set goals, create policies and establish formal boundaries for employees using social networking sites that are tied to the organization, i.e., put a formal strategy in place.

“The first step is to create and communicate rules of how to interact on behalf of the company,” she said. “Next, depending on what you want to accomplish, create a team that can “own” the initiative, monitor its progress and build on it, creating additional avenues for growth.”

Pat Speer is editor-in-cheif of Insurance Networking News.

Readers are encouraged to respond to Pat by using the “Add Your Comments” box below. She also can be reached at patricia.speer@sourcemedia.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (1)

One obstacle for insurers and social media is reputational risk and licensing viloations, especially where agent selling is concerned. SunGard offers a social media monitor that can be a positive first step - giving decision makers a safety net and compliance center for social media. This frees up the initial concerns so the broader intiatives you suggest can be approached with more confidence. http://www.sungard.com/financialsystems/products/protegentsocialmediasurveillance.aspx

Posted by: RM | May 6, 2011 10:57 AM

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