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Introduction
Curiosity killed the cat, or so the saying goes.  This can be especially true for those toying with social media and that have yet to develop a real strategy for handling the influx and simultaneous outpouring of information generated by this phenomenon on a minute-by-minute basis.  Social media is more than reconnecting with long-lost relatives and high school classmates, today its serious business.

In my experience, social media is user-generated content distributed through social interactions facilitated on an almost real-time basis by the Internet or other forms of electronic distribution. It all sounds innocent enough, but keep in mind as I told you above, social media is serious business.  For insurance organizations and professionals, this contrast between a somewhat frivolous perception of social media and the reality of it as a business platform or tool is what makes it as dangerous as it is useful and effective.

In order to use social media for maximum effectiveness, a fair amount of planning, strategy and protective measures are necessary.  There are not only privacy and regulatory concerns that must be conquered before insurance organizations can get on board the social media bandwagon; there are potentially significant data exposures for companies engaging without the proper security protocols in place as well.  All this and we haven’t even covered the fun part yet, social media as a tool for increasing brand recognition, establishing your company as a thought leader, improving customer relations, elevating the number of customer touch points with your company, and perhaps most importantly, acquiring new business.

Paying Attention
Those paying attention know that social media is not a new concept. Contrary to popular belief, social media didn’t just appear on the scene when Gen X became old enough to use the Internet. Social media has been around for years, in forms you likely never identified as social media before. “Early” examples include, email, AOL Instant Messenger, Internet message boards, and even Wikipedia.

It may be helpful to think of social media as the center of a wheel with many spokes (see figure 1). There are social networking sites (like Facebook, Twitter and LinkedIn), social bookmarking tools (like Digg and Delicious), instant messaging platforms (like AOL Instant Messenger and MS Messenger) and independently guided web vehicles such as blogs, wikis and message boards.

The social media wheel

Figure 1: The social media wheel

Needless to say, it is social networking generating the bulk of the water cooler talk today, with Facebook, LinkedIn and Twitter identified as the current “Big Three.” The commonality of social networking tools and the integration of them into our daily personal and business lives have led to talk about and use of these tools being almost second nature.  Few people pay special attention today when someone talks about “tweeting” or getting “linked in,” or even a poll they took recently on Facebook.

However, unless you are under the age of 25, you didn’t grow up using these tools. For those of us in that category, it is easy to dismiss it as a fad, but as the numbers of mobile workers grow and the world at-large generates increasing numbers of individuals “disconnected” from family, friends or co-workers, social networking becomes ever more important on a multitude of levels. Social networking, indeed social media as a whole, is not a fad to be summarily dismissed by companies as frivolous or a waste of time.  Those insurance organizations buying into the myth of social media as a fad could easily be tempted to turn a blind eye, to not invest time, energy and talent into finding valuable ways to use social media, or to resist adopting a definitive social media policy to regulate it.

Consider the sheer numbers of social networking as additional proof points of the importance of social media. As of January 2010, Facebook’s own statistics reported nearly 400 million users, so it should not be surprising that recent estimates say approximately 61 percent of all employees access Facebook during work hours. According to LinkedIn, the self-proclaimed “professional networking site,” there are over “60 million members in over 200 countries, plus executives from all Fortune 500 companies are LinkedIn members.”  In March 2010, Twitter recorded more than 1,500 percent growth in the number of registered users, and over 70,000 registered apps have been created for the micro-blogging platform to date.

According to Social Media Examiner, “Social media use on the rise: More than 71 percent of businesses plan on increasing their use of Facebook, Twitter, YouTube and blogs in 2010, according to the 2010 Social Media Marketing Industry Report.”  As you can see, social media usage continues to grow, and in spite of reports that it’s just another trend, it should be clear by now that social media is not going to dry up and disappear. New tools continue to appear and the way we use these tools continues to evolve. At this point, any insurance professional inclined to dismiss social media because it is not yet “mainstream,” or because buying decisions are not made based on social media interactions is at best naïve and at worst negligent.

Does the Death of Print Media Mean Life for Social Media?
Since one of the fundamental driving principles behind social media is to facilitate communication between individuals, groups, businesses, governments and higher powers alike, it stands to reason one of the first ways businesses found to use it is to “reach out and touch someone.” Print advertising gets more expensive each year as publishing companies struggle to find the right balance of content and method of delivery to attract executive, decision-maker readers.  Unfortunately, whether we are talking about daily newspapers, trade magazines or even books, print readership continues to decline in spite of the publishing industry’s best efforts at “audience recruitment.”  As prices have gone up, the influence behind traditional print advertising has decreased significantly.

Until now however, companies trying to stretch advertising dollars have not been able to identify any viable alternatives.  Banner ads and direct mail don’t measure up alone, which means the mixed media approach has become the best approach for any modern company building a brand and actively angling for new business. But even mixed media campaigns aren’t delivering leads in the quantities of decades past.  Companies are looking for the new silver bullet and trying every available new method of populating the lead pipeline. That makes this the million dollar question: Where others have tried and failed, can social networking deliver the attention of high numbers of customers and prospects in real-time?

It is a distinct possibility. Consider the growth in usage and popularity of professional networking site LinkedIn as a point in fact.  This social network launched on May 5, 2003 by inviting approximately 350 of the founders’ closest friends to “connect.”  It was well into 2008 before LinkedIn launched a mobile application, but according to the company website, LinkedIn celebrated “its 6th anniversary with 600 cupcakes and 40 million members.” Today, executive recruiters recommend LinkedIn as a requisite part of any job search, and LinkedIn recommendations have become the de facto announcement that someone is looking for a job.

Perhaps it is the power of community that comes pre-built into social networking tools which intrigues insurance organizations and businesses around the world with the promise of connections to constituents for pennies on any advertising dollar. Or maybe it is the ability to share, react to, comment on and discuss user-generated content that makes social media in general, and social networking in particular, very powerful indeed.

Defining Social Media Benefits for Insurance Organizations
Unfortunately, or fortunately depending on your point of view, insurance organizations are traditionally highly-conservative, preferring the hide and watch approach when it comes to new technologies, tools and ways of doing business.  On the bright side, this means insurance organizations are less likely than those in other industries to invest in a risky business venture. It also means they will forfeit new business dollars by dismissing changing needs and consumer demands as simple “trends.”

Now I’m not really “old school,” but having grown up and started my career before even the Internet was popular, I admit having a hard time at first finding the business benefits of social media for insurance. The personal benefits are easily identifiable, but how does a company improve the bottom line through social media? Should that even be the goal? Today, insurance organizations of all kinds, types and sizes are getting involved in social media and finding ways to achieve the business benefits so desired.

Let’s examine some of the ways insurance organizations, your peers and competitors, are using social media.

Agents are some of the most prolific users of social media in the insurance industry. Heavily invested in local communities, insurance agents quickly identified social networking platforms as the perfect way to highlight community involvement, showcase charitable activities, and promote themselves as upstanding citizens, all the while building a profile with local residents as a trustworthy resource.  Keep in mind, insurance is an industry built on trust, and in times of economic strife, the age-old question, “Who you gonna call?,” becomes important once again.  Consumers today are less likely to buy based on price alone, so agents with deep ties to the local community will have a competitive advantage.

Further uses of social networking by agents include collaborating with colleagues and team members, researching available coverage for important clients, building lists of prospects, and establishing “communities” of insurance policyholders, all online.  Many resources are available today to help agents utilize the social web.  One of the most comprehensive resources is a December 2009 report by the Agents Council for Technology (ACT), “Creating a Social Web Policy for Your Independent Agency.”  Designed to help agents set social media policy and determine levels of appropriate involvement in social media, the report can be accessed at the ACT website, www.iiaba.net/act.

While the uses of social media and social networking for agents are not only obvious, they are almost pedestrian in terms of the lack of imagination or foresight put into the applications.  Insurance agents have yet to harness the true power of social media, and perhaps due to the small business, decentralized mindset of the insurance agency, it may be harder to achieve.  The same is not true for insurance companies. Insurance companies are not only doing the obvious, such as providing new channels for customer service and support, establishing claims “hotlines,” and utilizing the marketing and communication capabilities to achieve better brand recognition, they are also beginning to explore ways social networks can be mined for information critical to the underwriting process, for conducting pre-employment screening, and running background checks on potential employees and policyholders alike.

A recent study covering Fortune 500 companies by Nora Ganim Barnes of the University of Massachusetts Dartmouth and Eric Mattson of Financial Insite, and reported on by Joe McKendrick of Insurance Networking News, found that in spite of the insurance industry’s lingering reputation as luddites, insurance companies are getting very comfortable using social networking platforms like Twitter as part of a modern marketing and communication plan.  According to McKendrick’s article, “Insurance Companies Tweet the Most, Study Finds,” large insurance companies, such as Allstate, Liberty Mutual, Northwestern Mutual and Hartford Financial, maintain 13 Twitter accounts.   And that’s just one of the Big Three social networking platforms.

Even insurance technology vendors are getting in the game by providing forums and user communities, access to technical resources, and thought leadership on subjects of importance to insurance companies and other stakeholders in the process. This modest toe dip into the waters of social media has afforded the insurance industry a tantalizing glimpse into what the future may hold, and for some the vision is almost mind-boggling.

User groups and customer service alternatives aside, how long do you really think it will be before insurance companies base relationships with technology vendors at least partially on the quality of the company’s online presence and its ability to deliver product via social media? Just how far out are the days when Facebook pages and online photo albums will be mined for demographic data and hazardous behavior traits that should raise your auto deductible? The answer is not long and not far. The medium itself is growing rapidly in terms of usage and capabilities.

Your Own Toe Dip
Hopefully, I have made you seriously consider how the growth potential and sheer staying power of social media can affect your business.  And, I’ve illustrated some ways in which your peers and competitors in the insurance industry are beginning to use social media for real, concrete benefits. With those vivid mental images in place, it’s time to start visualizing the best way for your company to get started using social media.

So, let’s talk about the first dip of your company’s toe into the sometimes murky waters of social media.  The single most important piece of advice I can give you is to have a plan. The plan will be different for each and every insurance organization, but it MUST exist. The privacy of policyholders, the record retention requirements of SOX, the security risks to your operation, and the expectations of stakeholders in the insurance process make it imperative for you to remember that involvement in social media can lead to a good end or a bad one.

Social media puts you in the hot seat, and from the first moment you dip your toe into the social media “pool,” you must be ready to act. Not react, but act. You must be aware of the response you want to create, the interactions you may generate, and you must be prepared to respond and to continue pushing the right buttons to generate interactions. If done correctly, social media is not a one way street, it’s a superhighway. Your posts, tweets, pings, and status updates will generate opinions in the minds of your existing and potential policyholders, agents, brokers, vendor partners and industry colleagues. By approaching social media in a strategic way, insurance organizations can make certain that curiosity doesn’t kill the cat.

Policy = Protection
Developing a definitive social media policy can help protect your brand’s integrity and limit your company’s liability for online actions. Even though it’s won’t be an easy process, by utilizing a team approach you can build a comprehensive corporate social media policy. Here are some basic steps you can follow to get started.

  1. Put together a multi-departmental team to assess your company’s participation. Social media does not belong to your company’s executive team, corporate communications, marketing, customer service or IT alone.  Each individual and department within your company will have some perspective or ownership of the project.  For example, your CSRs may see it as a way to address customer concerns faster than ever before, your executive team may see it as a platform for postulating about industry issues, your corporate communications team may want to use it as another outlet for press releases, and your marketing team may dream of worldwide domination.
  2. Define, document and prioritize your company’s purpose for participating. This will not be the same for every company, and it may depend on both internal and external factors such as views of your executive team, actions (or inactions) of your competition, desire for brand recognition, need to expand into new markets, and more.  Keep in mind, even assigning a priority to each purpose or goal may be difficult as parties within your organization vie for top position.
  3. Set attainable, measurable goals for social media participation. It may sound like a cop out to say that setting goals for social media participation is an intensely individual process, but it’s true.  Each insurance organization should outline a defined timeframe for a social media test case based on budget dollars that can be invested, amount of employee man hours that are required, and milestones that must be reached (i.e., Facebook page set up, editorial calendar developed for corporate blog, content experts recruited to contribute content, conversations started with customers, etc.)
  4. Map social media initiatives back to strategic corporate goals. If revenue generation is your number one strategic goal, it stands to reason that your social media initiatives must be directed at garnering leads for your top producers.  However, if your company has been the focus of some bad press coverage recently, perhaps your executive team is demanding a public fix to a public problem.  Running a social media campaign to highlight community involvement, charitable activities, or commitment to policyholders may be just what the doctor ordered.
  5. Identify the specific individuals, departments or functional areas that will be responsible for social media initiatives. You’ve heard the saying “different strokes for different folks,” right?  Well, it is especially true of social media.  You don’t want corporate communications professionals in charge of selling new policies any more than you want agents trying to determine why a payment was not processed.  Different individuals and departments will likely use multiple social media “channels” if you will to complete tasks assigned and achieve goals outlined.
  6. Outline how much time and effort your organization is willing and able to invest. Your budget will obviously drive this step in the process.  There should be limits placed on the time employees commit to social media initiatives, unless you have the ability to dedicate resources on a 100 percent basis. Keep in mind, even if you have resources dedicated to social media exclusively, you should be monitoring results of your company’s social media efforts to determine effectiveness ongoing and financial commitments for the future.
  7. Use social media tools to further goals while maintaining consistency in corporate messaging and branding. In social media, even the smallest details can make a difference.  Does your Twitter page design reinforce the colors of your company website?  Does it prominently feature the same logo and tagline promoted in your print and online advertising?  Does the company blog demonstrate your company’s commitment to issues about which your executives have spoken or causes to which you have contributed dollars?  Repetition is the key to recognition.  Use social media as a back-up plan for your other forms of marketing, advertising and advocacy.
  8. Implement an integrated plan that incorporates social media tools with existing tools, departments, individuals and channels. Just because today’s focus is on social media does not mean you give up print advertising, direct mail, banner ads and web seminars all together.  As evidenced in the point directly above, repetition is the key to recognition.  Make certain you tie your efforts together.  Your print advertising should include directions to “Follow us on Twitter,” or “Become a friend on Facebook.”  Company email signatures should promote the corporate blog and print advertising should include not only your website address, but also links to company commercials on YouTube.  You get the idea.
  9. Calculate your return on investment (ROI). This should not always be defined by obvious things like numbers of Twitter followers or Facebook friends.  Often the more important measurements come from positive feedback from policyholders or even the number of interactions generated in a given timeframe.  There are many social media monitoring sites that provide tools or dashboards to track participation, direct messages, click throughs, and more.  HootSuite (www.hootsuite.com), for example, provides a dashboard that allows you to post to and track multiple social networking sites and blogs from a single site.
  10. Re-evaluate and redirect on a regular basis to keep your goals within reach and your approach fresh. As consumer needs and market demands fluctuate, your social media participation and goals for participation should change as well.  Social media is a real-time way to connect with your constituents; agility and flexibility are part of what make it so incredibly powerful.

The Dangers of Inaction
Every issue has two sides, and while I hesitate to bring it up, I believe social media can in at least one way be compared quite effectively to both the use of marijuana and prostitution.  If you legalize it, you can regulate it. Every insurance organization should have an in-force social media policy.

It would be nice if the worst thing social media inaction could do is cast a big dark cloud over your brand. Chances are even though your company has perhaps blocked social media sites or just not made a conscious decision to participate in social media on a corporate level, your company name and logo are splashed all over Facebook pages, LinkedIn profiles and Twitter accounts today.  Unfortunately, all the exposure your company gets will not be positive, but the nature of social media means you have a chance to recapture control of the message and the eventual outcome of the situation based on the way you handle both positive and negative opportunities to talk back.

Your employees and your policyholders are likely already participating on an individual level, and without guidance from you (via a legitimate social media policy) about levels of participation, information that may and may not be shared, ways the company name and logo may be used and how negative posts from policyholders and partners should be handled, these individuals will make decisions that may not fit with your corporate strategy and goals. By putting a corporate social media policy in place that ties back to customer service and new business goals, corporation communications and branding guidelines, and which strictly adheres to privacy laws, you have the ability to influence how existing and potential policyholders, as well as employees and distribution channel partners, will perceive your brand.

Legally Liable
Unfortunately, bad publicity, or the casting of your brand in a negative light is likely the least of your worries if you choose to cast a blind eye on social media. Another thing to consider is the age old saying that “ignorance of the law is no excuse.”  When your company chooses not to participate in social media on a corporate level, you not only wiling dismiss the opportunities social media presents, you also limit your company’s ability to head off potential disaster. Lack of knowledge about information being shared via social media or acceptance of responsibility for control over social media participation relating to your company does not mean you cannot be held legally liable for the statements and actions of employees and partners alike that may claim to or appear to be acting on the company’s behalf. Remember, ignorance of the law is no excuse.

A fairly simple hypothetical situation between a disgruntled policyholder and an independent agent illustrates this point. Via one of the Big Three social networks, one of your policyholders makes a public statement via an online status update about the injustice of your company denying a claim. Assume that next, the agent who sold the policy chimes in on the conversation and agrees the claim should have been paid and that the policyholder was wronged by the insurer. Will the policyholder re-file the claim based on this revelation by the agent? Or, will the policyholder sue your company based on information provided publicly by both parties in the social media arena? Further, can your company be held responsible for paying the claim because of the agent’s statements, even if extenuating circumstances clearly made the claim ineligible for payment?

The answers to the above questions are not clear cut, but in order to save the relationship with the policyholder and maintain the company’s image as an upstanding corporate citizen, a compromise will likely have to be reached on the aforementioned claim. Of course, the area of law relating to social media is still evolving, but in the meantime, gray areas exist around the extent of the risk social media presents and the limits of liability a company may possess.  The best way to mitigate your company’s risk is by setting a social media policy in place and closely monitoring participation by those who represent your organization in any fashion.

“Hide and watch” is not a strategy insurance organizations can effectively cultivate when it comes to social media participation. As the demographics of your employees, existing and potential policyholders and distribution channel partners change, so should your approach to doing business. The next generation of insureds has grown up on social media. These individuals are inclined to take their fights straight to a public forum. How you rise to the challenge, or not, can define your success in the future.  Reap the benefits and avoid the dangers of inaction by establishing a corporate social media policy for your company today.


Jennifer Overhulse-King is a writer, as well as a marketing and public relations expert, with an extensive journalism background and specific insurance industry expertise. She has over 17 years of writing and editing experience including positions as editor-in-chief, contributing editor, copy editor, marketing director, photographer/photojournalist, stringer, marketing director, web editor, website developer, and beat reporter for a weekly newspaper. Jennifer has been published in print and web publications such as: The Stars & Stripes, The Louisville Business Courier, The Kentucky Post, The Dixie News, The Encyclopedia of Sculpture, Suite 101, Book Magazine, Insurance & Technology, Tech Decisions, Best’s Review, National Underwriter, Insurance Networking News, AT&T’s Networking Exchange, IASA’s Interpreterand the Journal of Insurance Operations. Jennifer is a member of the Insurance Marketing Communications Association (IMCA), the Insurance Accounting & Systems Association (IASA) and is editor of IASA’s Interpreter.

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