INSURERS AND SOCIAL NETWORKS: WHAT ARE THE ADVANTAGES?

With nearly 3.5 billion users worldwide and average daily use of 2.5 hours, social networks have revolutionized communication, and continue to innovate in this direction. From simple textual content to sending ephemeral videos, social networks have multiplied the modes of communication. Now they are an integral part of our lives, with users from all generations of age. The attraction for companies was inevitable: initially under-exploited, social networks have been used more and more finely in recent years.

We will focus here only on mass social networks, excluding other internet platforms (blog, forum, etc.) and intra-company collaboration solutions.

A contact channel with many advantages

Social networks have an advantage for notoriety and brand image: the strength of this channel is to rely on the weight that peer reviews have in the consumer’s purchasing decision-making process. : word of mouth has gone digital. 81% of consumers would be influenced in their purchases by the posts of their friends on social networks, and 78% would be influenced by the posts of the companies themselves. Logically, consumers have more confidence in the product or brand that has been purchased by friends or people who resemble them socially. And this, although this effect may be less pronounced for the insurance sector, where clients can use insurance comparators in their decision-making process.

In an omnichannel logic, companies have every interest in integrating social networks into their strategy; without neglecting their particularity. These are internet platforms that allow the sharing of content with a large audience, similar to public places on a global scale. Everyone can express themselves and be heard by everyone thanks to the sharing, like, and comment functions. This allows companies to communicate with greater impact and immediacy, and to interact directly with customers. It is also about responding to a strong expectation of the latter: the majority of them expect customer service to be available via social networks. The reward is equal to such an investment:71% of users say a positive customer experience on social media is likely to lead them to post a positive review or encourage them to recommend the brand.

What interest for insurance companies?

In the insurance sector, we observe that the life cycle of a contract allows little interaction between the client and his insurer. Classically, it is represented in four stages: subscription, endorsement, claim, and termination. With the rise of digital, insurers are seeking to become more proactive and intensify customer relations by identifying new contact opportunities. Social networks are one of the answers to this need because they are an effective way to communicate more frequently, create traffic, and work on the brand image. For example, companies with a strong digital maturity use social networks as a customer acquisition channel, thanks to effective targeting. This makes it possible in particular to reach young populations (the majority of social network users ) and gain notoriety with them. 

More importantly, the use of social media is useful at all stages of the insurance value chain: from product development to claims management, pricing, marketing, and distribution. Indeed, social networks are vectors of innovation: the use of chatbots via instant messaging platforms such as Messenger or Whatsapp makes it possible to offer customer service available at all times. More and more insurers are developing their chatbots, such as Axa’s Switch service, which makes it possible to obtain information on products, generate documents, or monitor claims. Other chatbots are also involved in the process of contracting or reporting a claim.

Also, social networks are a great way to obtain information on consumption habits, product type, and consumer profile. They offer the opportunity to collect customer feedback on many themes (product, service, journey, process, etc.) and to identify possible pain points, emerging trends, and weak market signals. A company fully integrating social networks will then be able to use this information for product development ), the enrichment of its CRM data, the construction of targeted offers, or the improvement of its processes. To go further, social networks can be used, no longer simply as a communication channel, but as design platforms. This is the idea of ​​the start-up Friendsurance, which proposes to create an insurance contract based on the personal network of policyholders, such as a circle of friends or family. Conversely, insurers can provide information to clients by publishing educational content on the risks and the right actions to adopt or help in the claim process, like the support offered by American insurers. during Hurricanes Katrina and Sandy.

In summary, the possible uses of social networks by insurers can be classified into three phases of maturity:

  • Listen: capture and analyze customer data
  • Interact: create a link between Internet users and the company
  • Integrate: integrate the use of social networks into back-office processes

These three phases correspond to different use themes: support for support functions, customer relationship management, management of offers.

Two key examples of the use of social networks:

For fraud detection

With nearly 34 billion dollars in the United States and 500 million euros in France for IARD, fraud is the bête noire of insurers. Social networks can then be useful in spotting fraud and guarding against negligence. Indeed, after a declaration of loss, the insurer could seek the information shared publicly by the declarant to verify whether some confirm the declaration or not. Since 2012, the American insurance company Allstate has used this method to fight against fraud; but faced with the amount of work required, it embarked on the systematization of the process with the acquisition of the start-up Carpe Data. The company gives as an example the case where an insured person declared that he could no longer work following an accident. The declaration could be quickly verified and the compensation paid: photos of the declarant presenting him in a wheelchair having been identified. 

This process can also be used to raise awareness: in 2015, the American insurance company Allstate had spotted a couple who used to post regularly on social networks. The couple had thus shared content relating to their vacation, thus proving their absence from home. Allstate took the opportunity to launch an awareness campaign on the risks of sharing personal information, by people themselves or by their loved ones. An advertising spot was launched, featuring the burglary of their home.

For the adjustment of premiums

The disruptive nature of social networks also impacts the calculation of contributions and bonuses. The insurer’s business is based on risk assessment and actuarial methods are based on statistical models. With social networks and the information shared by policyholders, companies now see the possibility of adjusting premiums according to the behavior and actions of the policyholder. This amounts to refining the calculations by integrating more personalization and fairness. To take the example of Carpe Data, if the company detects that an insured regularly practices climbing, the level of his contributions could increase significantly. Here we find the concept of hyper-personalization of premiums, a concept embodied by auto insurance pay how you drive. However, the price adjustment is based on the interpretation of images collected on the internet, with or without the consent of the insured.

Also, this process involves too much data to process to be applied to all policyholders, and for profitability not yet proven. It can have a very negative impact on the brand image, by giving the insured the feeling of being spied on, or even of having to censor himself. It gives rise to legal questions regarding the use of data. With the CNIL in France, and more widely in Europe, the legislation prohibits the storage or processing of customer data, if they have not explicitly given their consent. Regarding the adjustment of premiums, legislation across the Atlantic allows the automation of this process. In contrast, in France, personal data collected in this way cannot be legally used. Thus, the use of data from social networks is now used more in the fight against fraud.

An integration that presents many challenges

The use of social networks fully integrated into the business strategy requires a unified vision of the customer: an organization without silos is essential to work in an omnichannel logic. The question of the participation of social networks in the achievement of commercial, marketing, and operational objectives is major as well as the alignment with the values ​​of the company.

This also requires upstream preparation of information systems and their processes to integrate incoming and outgoing data from social networks into back-office tools (CRM, claim management, etc.). We are talking about the integration of a new channel whose information does not arrive in a standardized way. This involves the creation and training of teams dedicated to customer relationship management, content management, sales through this channel, etc. But also by providing Text Analytics tools(semantic analysis, sentiment analysis). Undue costs can be significant, so it is essential to design a strategy and set profitability targets. Indeed, the benefit of using social networks must be proven by the use of KPIs relating to business: it is not only measuring likes or retweets that have an impact but rather the number of prospects identified, pain points detected, or quotes made.

Finally, such an ecosystem must be agile and adapt quickly to different social platforms. A social network has an unknown lifespan and the past few years have proven its fleeting nature. User populations are changing rapidly and changing channels regularly. Insurers’ tools must therefore be flexible and not be specific to a given platform.

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