Superannuation headlines form last week March 2013
Why should insurance actuaries care about social media?
1.
Why Should Insurance Actuaries Care about Social Media?
Until a few years ago my reaction to social media, apart from LinkedIn for managing my network, was “Who cares
what I had for breakfast!” I am now a convert to the need to understand social media and the need to ‘be in it’ –
for actuaries and insurance companies. This short article is not intended to be a ‘How to’ piece. There are plenty out
there. This article is to show you why you and your insurance company should care about social media and to whet
your appetite to learn more.
Actuaries love stats and it is easy to find impressive social media stats. For example, there are 13 million Facebook
users in Australia and if Facebook was a country it would be the third largest. But how about this one: a Facebook
page created by a US General Insurance company has over 5.3 million likes – an insurance company! It is the
Facebook page of Flo, the Progressive Girl <https://www.facebook.com/flotheprogressivegirl>.
There is no great mystery or magic about social media – it is just brings us new ways to be social. Humans are social
beings so it is no wonder we embrace new ways to communicate and connect so enthusiastically.
For the individual, social media is about networking, collaborating, learning, sharing…and having fun. In this article, I
will focus on what social media can mean for an insurance company. Social media has applications internally and
externally. Corporate social media platforms such as Yammer are facilitating internal collaboration and helping to
break down silos in some of the biggest companies. Many business use social media very successfully to attract and
retain staff.
It is important to have a social media strategy that is integrated in the overall corporate strategy. Not having a
social media strategy is a strategy, just not a very good one. As with any strategy, it starts with defining objectives –
what are you trying to achieve. This applies to the corporate and also to individuals.
The most obvious uses of social media by business are branding and advertising. Even if you do not have a presence
or voice on social media, your customers and potential customers will. Many people use social media to let the
world know about bad consumer experiences. If nothing else, you must be monitoring and responding. Social media
gives the consumer enormous power. You cannot limit this but you can harness this. Look at Flo, the Progressive Girl.
Another interesting case study is Devitt, a UK insurer that specialises in motorbike and related insurance. It created an
online community, www.keepbritainbiking.com. The insurer is now not just a company marketing to bike enthusiasts
but an active participant in the community.
An extension of branding and advertising is to customer service. Many businesses now see social media as an
important channel and whilst there are many compliance and regulatory issues in the financial services industry, it is
happening there as well. The only way to do this effectively is to be monitoring social media activity that mentions
your brands. If you’re not convinced of the importance of this, check out www.servicerage.com/car-and-home-
insurance and click on any of the companies to see what people are saying. Whilst not an insurance example,
http://crowdsupport.telstra.com.au/ is an interesting example of how a business has embraced the power of the
crowd to provide customer support.
Whilst social media is about communicating, it is closely related to that other buzz word, big data. Think of the
amount of information out there in cyberspace for clever insurance companies to harvest. Consider the case of a
woman in Florida that told her car insurer that a hit-and-run had damaged her car. The woman then told her friends
on Facebook that her daughter had caused the accident. The insurer’s investigators searched social media, found
the post, declined the claim and the woman was convicted of filing a fraudulent claim. Yes, a disturbing story in
many ways but a sign of things to come.
Social media is changing personal and professional communications. I agree, not always for the best but it is not a
fad so rather than resisting, I have decided to embrace it and I hope that after reading this article you will too.
Connect with me on LinkedIn and Twitter (@stephenhuppert) to continue the conversation and share your stories.
Stephen Huppert <sthuppert@deloitte.com.au>
Partner
Deloitte Actuaries & Consultants