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February 9, 2017

3 Useful Cases for Social Media

Summary:

The AXA-Facebook strategic partnership was seen as a milestone in 2014, but what has actually happened?

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Looking into the past is sometimes the best way of predicting the future. And when it comes to using social media in the insurance industry, past announcements can be highly prescient. For example, if we go back to 2014 when AXA and Facebook announced a strategic partnership, it was commended in the nascent insurtech industry as a milestone moment and was seen as a brilliant, innovative move by industry-observer group SMA. But after 2 1/2 years, what has actually happened? Can customers buy insurance on Facebook yet? Is social media being used to augment underwriting data?

Surprisingly, all the resources invested by insurance companies have not led to meaningful innovation in the niche field of using social media in insurance.

Until now.

See also: How to Capture Data Using Social Media  

In this overview, I will present three ways insurers can use social media to everyone’s advantage.

1) Outbound marketing

The most common form of social media use is by far outbound marketing. That makes sense, as 50% of consumers use social media to research their insurance purchase. However, merely posting updates on the latest way to save on your home insurance premiums won’t cut through the clutter, which is why Aviva and others use more creative formats.

But insurers have not yet absorbed the meaning of “social” in social media, and they often see it as another one-way communication channel. Used effectively, it can make the brand appear more “personal” and relatable, if insurers are interacting with customers on social media — this is easily done by simply posting Facebook updates or tweets.

BoughtByMany is a startup trying to change the situation by allowing consumers to come together and group-buy specialized insurance policies. Using outbound marketing enables a company to have more control over who is being targeted in a marketing strategy and ensure that money is being spent effectively to reach them. Insurance companies — especially — can benefit from using different social media channels to advertise their products, as they can target those in certain areas of specific ages or even different income levels. Social media can also greatly help insurers because they can use the public data on an individual’s social media profile and generate insurance quotes in a quick and simple way for the buyer.

2) Fraud prevention

It makes sense for insurers to look through a claimant’s social media channels for signs of fraud — for example, with home, car and disability insurance. In practice, this is very difficult and can lead to PR problems when handled in the wrong way. But because insurers uncover 350 insurance frauds totaling £3.6 million every day, (according to the Association of British Insurers), it is likely that more insurers will do anything they can to avert fraud. If insurance companies are providing quotes for customers by using their social media data, there is no room for buyers to falsely represent themselves in the application, because all data is gathered automatically from their profile once the user has granted access. Using identity verification mechanisms already built into the social media networks is another practical way of reducing fraud, because it creates an extra layer of security for the insurer.

3) Faster and friendlier customer journey

With so many people using various different social media platforms, it makes sense for businesses to adapt. What we are seeing today is many companies implementing a “helpful chatbot” function onto their website. One innovative startup is Spixii.ai, which uses the bots to speed the customer interaction. Businesses using certain social media channels, such as Facebook, are now able to chat directly with the customer, making it appear much more personal.

If all our lives are already on social media, why are insurance companies asking so many questions when we buy an insurance policy? Why can’t we just connect our Facebook or LinkedIn accounts and autofill at least the quote forms? When being required to fill out long, tedious online insurance forms, some users may not only lose interest but also not be sure on the correct answer, which, in turn, could lead to giving up during the application or receiving a policy that is not right for them. So far, using social data for insurance has not been done, but it represents a massive opportunity to increase online conversions by making life not only easier for the consumer but providing a more accurate and a faster customer experience, as well.

See also: 2 Concepts on Social Media and Analytics  

The exponential growth of social media shows no sign of slowing, and, although insurance companies are only beginning to use social media, we are confident of rapid adoption. If social media has already transformed other industries, isn’t it only a matter of time before it happens in insurance, too?

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About the Author

Erik Abrahamsson is the founder and CEO of Digital Fineprint, a London-based analytics company helping insurers use social media. In January 2017, it was picked as one of the top five insurtech companies worldwide for Accenture’s Innovation Lab.

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