Wherever one looks today, people are writing about the importance of social media and how it is changing the way we do business. At a general level, they are probably right but the devil, as always, is in the detail.
In collaboration with my colleagues at Accenture, I’ve been giving the implications of social media for insurance a lot of thought. The first thing to realize is that insurers don’t really have a choice—if their customers are using social media to talk about insurance, then they need to work out ways of participating in that conversation. Social media offer an all-too-rare opportunity for insurers to listen to and, more importantly, interact with their customers.
However, it seems like many insurers have not fully grasped the full benefit available from social media. For example, it is a cause for some concern that, according to recent Accenture research into claims, only 28 percent of insurers in Europe, Africa and Latin America are using social media to support the claims function, with 56 percent planning to implement something in the next three years. Insurers in the United States are more advanced, with 40 percent already using social media in claims, but only a further 20 percent is planning to do so within the next three years.
Insurers need to embrace the potential of social media to help them build trust: the cornerstone of insurance. Consumers have to believe that their insurance company understands their personal circumstances and can help them mitigate risk effectively, and that the company will provide the right kind of response when things go wrong. That kind of trust has always been—and continues to be—built up through personal interaction. However, social media are emerging as a way in which this relationship-building takes place. The nuances vary between segments and geographies, but there is no doubt that social media are becoming an important tool.
The growing technological sophistication of social media is making it possible for personal relationships to truly become digital. Analytics and Big Data provide the back end, so to speak, giving insurers the insight they need to talk directly to customers, but the front end is social media. It’s only when the two come together that insurers can start to build personal, digital relationships with many customers, relationships that are based on trust.
Some insurance companies are making bold steps. USAA, which offers insurance to the US military, is using social media to interact with its closely knit customer base and rise to increased customer expectations. And a leading Spanish insurer is using information in part gleaned from social media to lift conversion rates for cross-selling by up three times and increase the value of new purchases by more than 15 percent.
To learn more about gauging the value of trust, read pages 16 and 17 of Accenture Technology Vision 2013 (PDF; opens in a new window).
In my next blog, I want to explore the concept of trust a bit more closely, along with the allied concept of authenticity. In subsequent blogs, I’ll take a more general look at how insurers can start to become masters of social media.