Insurers and social media: vast potential, significant challenges

Mastering social media offers insurers a wealth of benefits

Indeed, the potential benefits of social media for insurers are compelling, and include:

Enhancing the brandSocial media can enable insurers to recognize and empower influential brand advocates; to demonstrate that the organization listens to, and answers, customer questions and complaints; and to react in a timely fashion to issues that, if left unaddressed, could otherwise lead to significant reputational damage.

Reducing costsBy letting consumers help each other— and by avoiding having to answer the same questions over and over—social media can help insurers lower call center costs. Similarly, effective use of social media can redirect efforts and resources within customer service to more critical issues, while using this virtually free medium for customer acquisition can help realize savings, as well. Close supervision is needed, however, to make sure that customers receive the right information.

Influencing customer behaviorSocial media helps insurers strengthen relationships by building trust. Through amplification of word-of-mouth marketing from satisfied customers, insurers using social media can increase their ability to change customers’ perceptions.

Increasing customer satisfactionInsurers can monitor social media to quickly identify negative sentiment and can take proactive measures to address emerging issues. Over time, social media can help build customer loyalty through prolonged interaction and “presence,” increasing the Net Promoter Score (NPS), that is, the percentage of customers who would actively recommend the brand to others.1

Increasing salesThrough the addition of product ratings and reviews, and the introduction of viral campaigns designed to spread through sharing, insurers can use social media to acquire new customers. Peer reviews, ratings and recommendations can be leveraged to generate feedback and help identify potential new customers, as well.

Supporting innovationSocial networks can be a valuable source of customer insight for insurers with the ability to listen to customers and crowd-source innovations. Insurers can gain real-time competitor intelligence and identify partnership opportunities that can be useful in launching new initiatives.

Introducing new insurance productsSome insurers have started to propose a new customer service—based on social media—to protect users’ public information. The insurer would “guarantee” a clean public life on the Internet and removal of fake accounts, defamation and other online concerns.

Although it is a relatively new phenomenon, social media has become a vitally important component of human resources, marketing, customer services, and public relations. For insurers, social media can provide a continuous, interactive relationship with the customer, with multiple opportunities to listen and to engage with individuals and communities in a highly personalized dialogue.

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FIGURE 1. The benefits of mastering social media

Customer acquisition

Customer-focused

Increase revenue and market share

Brand building/awareness/PR

UGC reviews/ratings/testimonies

Word of mouth/viral marketing

Direct (mainly charities)

Search engine optimization

Rich/targeted advertising

Customer insight and innovationCreate, improve and differentiate products and services

Buzz monitoring

Crowdsourcing

Sentiment analysis Private and open communities

Customer experience and serviceImprove customer loyalty and reduce or avoid costs

Self-service resources Self-help communities Monitoring and engagement

Agile collaborationImprove employee effectiveness and knowledge sharing across the organization

Knowledge capital & expertise sharing

Co-creation

Business network

Collaborative ideation

Gamification

Network building

Talent acquisition and retentionImprove image, attract relevant talent and listen to employees

Brand awareness Talent identification Talent database

Organization-focused

New types of product Market research/competitive intelligence

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Opportunities—and risks—in social media

The speed of adoption of new social channels has been truly remarkable. Facebook, which was only launched in 2004, now has 825 million active users (with 425 million of those active on mobile devices)1, representing annual growth in excess of 200 percent. Twitter, new in 2006, is growing even faster, at 800 percent per year. New customer behaviors have accompanied this rapid adoption. Social media creates an open forum of opinion in which people tend to trust the recommendations of others.

The proliferation of social media platforms—including public “off-board” (that is, not controlled by one company) platforms such as Facebook, Twitter, Foursquare, YouTube, Pinterest, Highlight, and others, but also public “on-board”

platforms managed by a company—has added to the expansion of digital and direct channels such as mobile, Internet, and interactive television. This expansion, however, has led to the fragmentation of customer touch points. New channels emerge every few months, making it difficult to establish a unified relationship with the customer. This fragmentation— and the high velocity of communications—means that brands can be damaged in a few hours. There is little control over external social channels and, while companies can introduce their own content, it is hard to counter or replace what has already been disseminated.

While social media presents insurers with many opportunities, the rapid adoption of social media—which accompanies and, to some extent, encourages radical changes in customer behavior—also presents insurers with new challenges and risks. To succeed in this environment, organizations need to move beyond the limitations of traditional marketing and customer service, moving to a mode of continuous relationship- building with the customer.

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Insurers and social media

The financial services industry as a whole, however, has not created a great deal of social media engagement. One measure of this is that there are no financial institutions in the top 50 brand pages on Facebook (although, as observers have noted, there is a difference between the sheer volume generated by a media page and the active engagement sought by an insurer).2 While financial services companies do not have the same number of fans or followers as “hot” companies—whose fans/followers may number in the millions—the engagement level for financial services companies as measured by likes on Facebook, re-tweets on Twitter and other metrics may be quite high. The opportunity lies in the level of engagement, not in the sheer number of those engaged. Some insurers have had significant success in building engagement; for example, the “Progressive Girl” Flo, a character created by the U.S. insurer Progressive, has her own Facebook page with over 3.7 million participants.

Accenture’s own research into global life and P&C customers indicates that four out of five consumers would use recommendations on social media to help them choose a new insurance provider; indeed, for about 30 percent of respondents, these recommendations would be their main selection criterion, with younger consumers almost twice as likely to use recommendations as their primary criterion.

A number of other insurers have implemented high-impact and high-visibility social media initiatives. The U.S. insurer USAA, for example, created a “My USAA” tab to give its customers an application bookmark on their own Facebook page with quick links to usaa.com, enabling members to quickly transfer funds, pay bills and obtain proof of insurance. The company also established a financial advice blog and posted financial advice videos on YouTube. In addition to using Facebook and Twitter, USAA has added blogging, rankings, discussion forums and other social capabilities to its own website.

In general, the insurance industry has taken a cautious, “wait and see” approach to social media. While 28 insurers listed in the Fortune 500 have established Facebook pages—and 20 have Twitter accounts—insurers are only now beginning to explore the real potential of integrated social media campaigns. Insurers have lagged, not only behind entertainment and consumer products companies, but behind other financial services firms such as banks, in using social media to build engagement with customers. Insurers, of course, really have no choice about participating in social media. With people engaged in social media all around them, the real question is how to participate.

Aetna, another U.S. insurer, seeks to engage members through The Life Game, a social game where members record personal health and wellness goals. If they choose, players can connect with other users and share goals with them. Players can also publish their goals on Facebook or Twitter, sharing their successes with their own social network. The initiative increases Aetna’s visibility and customer engagement while enhancing its brand. Similarly, ICICI Prudential, an Indian insurer, launched “Living Your Passion,” a social media initiative to encourage people to talk about their passions and what they would like to do post-retirement. The goal of the program is to position retirement in a positive light while engaging customers over time.

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The three phases of social media

Phase I: listenIn the Phase I or “Listen” mode, organizations analyze public information available from social media with two primary objectives in mind: first, to determine the direction and tone of current customer sentiment; and, second, to identify influencers who have a disproportionate impact upon customer opinion and decision-making. In Phase I, research and development, marketing, public relations, investor relations and other communications functions have primary responsibility

To assist with analysis, insurers need a systematic approach to identification of influencers, analysis of social media mentions (with key questions raised by customers), and in-depth analysis of topics and sentiment. Analysis should also be undertaken by channel in conjunction with development and delivery of recommended actions. Insurers need to ascertain that such analysis is conducted on a 24/7 basis in all geographies—and in all appropriate languages—where the insurer has a presence.

Through its work with a wide range of companies engaged in analyzing, employing and innovating with social media, Accenture has identified an evolutionary process which takes place in three phases, as shown in Figure 2.

for monitoring, information-gathering and determining an appropriate response if and when an issue is identified.

To participate effectively in Phase I, insurers need to identify and employ tools and services, both to enable live monitoring and alerts, and to provide in-depth, actionable insights. For monitoring and alerts, for example, an insurer might assign communications staffers to conduct periodic monitoring and “spot checks” of different media, and to set up feeds to provide real-time notification when certain types of stories, blogs or comments are posted online.

FIGURE 2. The evolution of social media mastery

ServeIT, Multichannel

DriveMarketing Operations Sales, Recruiting

SupportCustomer Care

ReactPR, IR, Communications

LearnR&D, Marketing, Customer Insight

Social media monitoring and alerts

Social media analysis

Listen

Social CRM Transformation Program

Off-board social media

Engagement management

On-board social media

Profile-based optimization

Seed tracking & attribution (ROI)

CRM integration

Engage

Multichannel integration

Optimize

6 | Insurers and social media: vast potential, significant challenges

ServeIT, Multichannel

DriveMarketing Operations Sales, Recruiting

SupportCustomer Care

ReactPR, IR, Communications

LearnR&D, Marketing, Customer Insight

Social media monitoring and alerts

Social media analysis

Listen

Social CRM Transformation Program

Off-board social media

Engagement management

On-board social media

Profile-based optimization

Seed tracking & attribution (ROI)

CRM integration

Engage

Multichannel integration

Optimize

Phase II: engageIn Phase II, companies continue their listening activities, but also take steps to engage with customers in a systematic fashion, seeking to establish and build a presence both through on-board (brand-owned) and off-board (public) channels to participate actively in customer interactions at scale and across the organization.

Development of on-board social media is typically based on best-of-breed social platforms, including, but not limited to, blogs, ratings, reviews, forums, Q&A sites, wikis, and media-sharing capabilities. This development may take place exclusively through private communities or may integrate the company’s presence in off-board channels. On-board channels are useful for insurers to create and federate specific communities by leveraging social media. These communities may include virtual communities of untied agents; virtual communities of specific affinity groups (USAA has established a community for military wives); and virtual communities of tied agents.

Insurers may participate in off-board social media through branded pages and groups on established channels such as Facebook, Twitter, Google and LinkedIn. Different off-board social platforms will be used with different goals in mind; for instance, Twitter can be used as a customer-service type of social channel, with insurers setting up different Twitter accounts for various brands to deal with different types of customer queries. Facebook can be used not only for customer applications but for maintaining engagement with established communities through announcements, quizzes and other events.

Another key aspect of Phase II is what Accenture has termed “engagement management.” It is essential, in Phase II, to manage the flow of interactions, to accurately identify and engage “influencers” who have an outsized impact on the insurer’s brand, and to establish an effective system for auditing and reporting both on-board and off-board activities and contacts.

In addition, the insurer should have an underlying social media strategy and governance structure in place, to clearly establish which types of functions will manage different types of interactions on different social media platforms. Accenture has extensive experience in defining and developing appropriate strategies, roadmaps and approaches.

During this phase, more corporate functions are involved in social media, including customer care, the overall marketing operation, the sales force and the recruiting team. With engagement management programs in place, the stage is set for the final phase of social media.

Phase III: optimizeMost insurers have optimized their traditional marketing channels; that is, they have linked these channels to a comprehensive customer relationship management (CRM) program and are working toward a single view of the customer. The “Optimize” phase of social media brings this same level of optimization to emerging social channels, enabling insurers not only to maintain a single view of the customer—with the customer’s contacts with the company fully integrated into an overall profile—but to track the success (and the return on investment) of specific campaigns and identify particularly effective social channels.

By using profile-based optimization, insurers can obtain more advanced analytics in relation to particular content, networks and customers. And, with better and more detailed information, insurers have a clearer path to integrating social media into a holistic framework that encompasses all marketing channels, with harmonized messaging and synchronized deployment of services.

The optimized use of social media allows insurers greater reach and flexibility in marketing to niche consumer groups, including those with specific interests (such as owners of recreational vehicles) or special needs (such as small business owners). The social network can also serve to help an insurer’s agent network acquire and retain customers. Properly structured, the insurer can use social media not only

to identify promising leads, but to refer such leads to the right agent for follow-up, whether that agent works within the insurer’s captive sales force or as part of an independent agent/broker network.

Insurers can also integrate social media and CRM with an opt-in approach, in which the customer decides and agrees to follow and/or engage with the brand on a social platform and provides access not only to profile information, but also to his or her daily activities as posted on this social platform. These might include check-ins and likes on Facebook, check-ins on Google +1, follows and re-tweets on Twitter and others. The company can link live information from social media with internal CRM and derive better recommendations and more detailed dialogue with the customer.

Through seed tracking, another technique, the insurer can measure the viral effect (in terms of likes, +1s, re-tweets and other metrics) of specific posts on social platforms. This can be done, for example, by posting a link on the company’s web site, twitting it, and then measuring how many customers click, re-tweet and otherwise respond.

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Developing a social media strategy

1. Define the company’s visionThe company should be able to map out a two-to-five-year strategic roadmap of social media initiatives, addressing issues related to business strategy, organization and governance and enabling technologies. Key deliverables in this step include defining business objectives; assessing current capabilities; and analyzing best practices and trends.

2. Develop metricsIn the second step, the company identifies gaps between current capabilities and best practices, along with future needs. The candidate initiatives are listed along with critical success factors and high-level key performance indicators (KPIs) to measure the effectiveness of each initiative.

3. Create an organization and governance structureWith the initiatives identified and metrics in place, the team designs an organization and governance structure with appropriate controls and reporting lines. Elements of such a structure may include a steering committee and “communities of practice” to deal with issues encountered in a real-world environment. The organization and governance structure should also address concerns such as training and incentives for adaptation.

4. Select technology and create a solution blueprintWith agreement reached on the first three elements, the team can move forward to selecting technology and designing a blueprint for an integrated social media solution.

Tracking the phases of social media development, Accenture has created a four-step process for creating and implementing an effective strategy for social media.

8 | Insurers and social media: vast potential, significant challenges

Innovating through social media

These include:

• Using on-board social media to create a platform for independent agents to come and share ideas, experience and expertise

• Capturing feedback and input from customers for use in product design. Starbucks, for example, stages competitions in both on-board and off-board venues to gain insight into what they want in terms of store design, new products and other features

• Using off-board social media such as Facebook and LinkedIn to develop a recruiting presence, especially among younger individuals more likely to use and/or frequent these sites

• Employing social media to complement call centers, helping reduce the number of incoming calls and, in effect, helping customers to answer other customers’ questions

• Putting a “human face” on the company by publicizing charitable activities, sustainability initiatives, and other initiatives not directly related to insurance sales

The social network has proven to be fertile ground for experimentation and innovation. While most companies think of social media first in terms of customer acquisition or customer service, there are numerous other ways in which insurers have put social media to use.

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CASE STUDIES

Two Ways Insurers Use Social Media

American Family Insurance: “Be a Fan, Be a Winner”

The U.S. life insurer American Family Insurance is piloting a Facebook application that allows Facebook users to earn free merchandise from their favorite sports team, simply by becoming Facebook fans of both their team and American Family. The application links fans of two different Facebook pages.

The insurance company is partnering in a FanFare pilot with teams and organizations across the U.S. As an added benefit, American Family Insurance is donating one dollar to the American Red Cross for each of its first 5,000 Facebook fans.

The program was launched in August 2009 and has been successful in increasing American Family’s exposure to new customers while helping with customer acquisition and retention.

Generali: Kontsurnous—Tribes Benefits

French P&C insurer Generali launched a new type of insurance, Kontsurnous (a play on “Count on us”), that allows customers to group in “tribes”, and, through a loyalty program, to share the benefits collected from insurance subscriptions.

The tribe collects points for each car insurance contract signed by its members, and all member of a community have a right to a share of points collected by all other members of the tribe.

“K-points” collected by the tribe benefit members who become victims of an accident, providing up to 100 percent insurance excess reimbursement.

Prices are customized according to the behavior of the community. This on-board program differs from traditional loyalty programs that provide non-transferable individual advantages.

10 | Insurers and social media: vast potential, significant challenges

Social CRM and the problem of scale

Moving forward in social media

Insurers experience a rapid evolution when they adopt social media programs in Phase I and Phase II. In the early “listening” stages, the challenge is to integrate comments made via Twitter, Facebook and other venues into contact center activities. In particular, comments and questions need to be redirected to the right expert within the customer service organization so that they can be properly addressed.

In Phase I, a small number of individuals may be able to monitor social media and also take responsibility for directing customer queries. As volume grows, however, in Phases II and III, the insurer

It is clear that social media presents insurers with a tremendous opportunity to increase their visibility and their engagement with customers, not least through the development of diverse communities. Insurers may never be among the “hot” social media brands based on the sheer volume of hits, but they can build engagement and generate customer interest at much higher levels than many other industries. While most insurers have at least begun to explore this potential, they still need to address concerns related to customer privacy and regulatory compliance as well as to scale and integration.

needs to find ways to automate the process, particularly if its own efforts at viral marketing are successful and generate a vast number of responses.

Insurers entering these phases need to implement solutions that identify which responses should receive automatic replies, and which require a detailed, expert response. In addition, insurers need to be prepared to respond to the type of volume experienced on a daily basis at call centers—and to do so immediately and in a way that is respectful of customer privacy.

Social media has the power to re-shape the insurance industry, creating new points of differentiation and opening up new opportunities for leadership. Accenture believes the insurers that will be most successful in employing social media will those that view these initiatives as part of a comprehensive approach, rather than as a series of one-off programs.

When high volumes of incoming social media questions, comments and responses are reached, insurers face other challenges in the capture and management of vital data. Ideally, each touch point created by a social media contact will be integrated into the overall CRM effort, with the insurer knowing why and when the customer made contact.

Attaining this level of integration, however, poses significant challenges to many insurers, especially those relying upon legacy front-end policy administration systems that make it difficult to obtain a single view of the client.

To do so, however, many insurers will need to re-examine their current IT infrastructure—particularly legacy policy administration systems—to make sure that the capabilities are in place to support such initiatives at scale.

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Copyright © 2012 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

About the authorsEmmanuel Viale is a Director of the Accenture Technology Labs. Based in the Sophia Antipolis Lab in the south of France, he specializes in identifying and delivering applications of innovative technologies for our financial services clients. He can be reached at emmanuel.viale@accenture.com.

Christian Souche is in charge of Accenture Social Media assets development, as well as an Accenture European R&D social media initiative.

Notes1 http://www.netpromoter.com/np/ calculate.jsp

2 http://techcrunch.com/2012/02/01/facebook-has-425-million-mobile-monthly-active-users-up-from-350- million-in-september/

3 http://www.visible-banking.com/2012/ 03/still-no-financial-institutions-in-the-top-50-brand-hepages-on-facebook.html#more

About AccentureAccenture is a global management consulting, technology services and outsourcing company, with more than 246,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.