 By Chris Andrew, Managing Director – Europe, Hearsay Social
Around the world and across industries, social media has disrupted business. Though many companies have started to see the value of social media to market research and service customers, the insurance industry in particular stands to benefit from Facebook, LinkedIn, and Twitter for sales, customer engagement and service.
Here I've outlined key points about social media in the insurance industry: how it rose to prominence, benefits,risks and how to get started.
The rise of social media in the insurance industry
Today, nearly two in three British adult Internet users actively use social media. In the 16-24 year oldrange, that figure jumps to 92 percent, but the older segment is the fastest growing population on social. Around the world, over a billion people use Facebook, LinkedIn, and Twitter to connect with family and friends, follow specific interests or businesses, and share important events occurring in their lives.
The insurance industry is in no way isolated from this change in preferred communication medium. In North America, for example, 80 percent of insurers report using social media for business . Nearly half of the remaining 20 percent plan to put social media into effect within the next year. Outside of North America, social media for business is beginning to take off.
Conveniently for insurance organisations, insurance agents are the most natural "social networkers" on the planet. Sales individuals have always educated clients, invested in long-term relationships and grown their businesses through word-of -mouth referrals long before social, mobile and digital technologies existed. For these reasons, social media is a natural extension and a new channel for insurance agents to communicate with their audience.
Benefits and risks of using social media
The more salespeople and marketers employ social media for business purposes, the more organisations must make a conscious effort to understand, evaluate, and mitigate the risks involved.
Generally speaking, there are two kinds of risk every insurance organisation must consider.
In the UK specifically, insurers must pay heed to regulations established by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The FCA’s Conduct of Business Sourcebook (“COBS”), for example, requires financial and insurance firms to ensure that their communications and/or financial promotions are fair, clear, and not misleading. Insurance companies seeking to adhere to these rules across the organisation most certainly will end up relying on a combination of policies and tools to maintain visibility into social activity.
Beyond regulatory risks, businesses must ensure that their social sales and marketing efforts uphold the brand’s image and values. Brand risk, like regulatory risk, proves difficult to avoid without proper policies and tools.
To an insurance company, the benefits of social sales and marketing are many and varied. At the most basic level, it is imperative for every organisation to have a social media presence simply to reach and be discovered by over one billion people already on social networks. If your company does not meet customers and prospects there, your competitors certainly will.
Companies in the US such as Allstate, AXA Advisors, Northwestern Mutual, and others have found success by empowering their agents to be trusted advisors and subject matter experts on social media. Local employees prove to be the greatest asset to a company as they are best suited to offer authentic, highly personalised, customer-centric service. This approachis becoming more prevalent in the UK too, as companies recognise the importance of this style of engagement.
Ultimately, the greatest risk in all this is not being on social media at all. You must serve the customer where and when they prefer – today that means over mobile and on social media.
Tangible steps to social media success
Setting clear goals for your company’s social media usage is the first step toward establishing a successful program. Maximize your efforts by collecting input from across the C-suite, especially chief sales and marketing officers, and make sure to include legal or compliance teams to identify any potential risks. In this way, the team can set clear expectations for what social media should accomplish across the organisation.
After setting goals, create a social media policy and train the organisation so employees know what they should and should not be doing on social networks. In the case of some employees, this could be as simple as making sure the brand name is being respected on social. In the case of customer-facing employees this might mean providing daily or weekly social media content as a means of sourcing new prospects or following up with current customers. With access to social data, consumers expect the conversation to be increasingly timely and relevant to their individual lives. Social media is helping organisations empower their sales people with the right content at the right time.
Last but not least, make sure to continuously enforce all the above and monitor your efforts. Certainly reevaluate your goals in the early stages to make sure they’re realistic and creating impact for the business. Insurance has always been a social sale.
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