How Social Media Is Transforming Insurance Company Practices

At Socialnomics, we’re always writing about the enormous impact of social media on so many aspects of our daily lives. Recent posts have shown the importance of using social media for a company’s business sales, its online business reputation, and even one’s TV entertainment.

But here’s a new twist – have you ever connected social media with insurance? Sure, it’s not top of mind, but more and more social media users are using online images, blog posts, and video clips to make their own case for an insurance claim, even before an insurance inspector shows up.

Because of the immediacy of posted digital images and video clips, and the accessibility of reaching out to insurance companies via social media, the insurance industry has stepped up its game to become more social. Trade publication Business Insurance notes that insurers are using social media for company branding and marketing purposes, but more frequently they’re using it in claims work for bigger advantages.

“Insurance companies have long leveraged social platforms for marketing and brand building, but now they also are finding that social mediums furnish a bounty of data that can be used to improve the underwriting and claims process,” the publication writes.

The advantage of using social media can work both ways, both for the benefit of the claimant and for the benefit of the insurance company. For instance, if you’ve just been involved in a car accident, you should definitely use your smartphone device to take some pictures and use your voice recorder to describe the event that just unfolded. Having just been in a car accident a few months ago, I can assure you that having the images uploaded to the online claim filing system for my car insurance company helped my claim move forward quickly in my favor.

But conversely, insurance companies using social media can check the validity of claims in a type of surveillance scenario. Business Insurance notes an example where fraudulent claims can be uncovered by careless workers’ use of social media. For example, an insurance agent noted that a warehouse worker who filed a claim for an injured arm wrote on his social media about playing a rock show that upcoming weekend as a guitarist. After checking the guitar player/injured warehouse worker’s advertisement for the show on Myspace, the insurance company’s investigator took pictures of the fraudulent worker and subsequently denied the claim.

Social media helps out insurance companies too, by lowering their marketing costs. Most insurance buyers find insurance companies on the Internet, seek out prices and policies, and then use that arsenal of information to work with a local agent or broker to actually buy the policy. This tends to happen more with complex life insurance products, or commercial casualty coverage, rather than more straightforward auto insurance purchased online.

Using social media allows consumers to get quick responses to questions and easier price comparisons between insurers. Plus, they can use social media to reach out to friends and seek advice, recommendations, and more to better assess which insurance plan might be right for them. After all, being social on social media is half the enticement.

Likewise, insurance companies that are active on Twitter, Facebook, Reddit, Quora, and other social information sites can transform insurance marketing language into easy-to-understand points for consumers. And that will lend itself to bringing in more customers in the long term, so the business demand to satisfy consumers online is becoming an important daily work task for insurers.

Twenty-somethings looking to buy vehicle insurance or life insurance for the first time aren’t going to call a local insurance agent. They will go to Google search, find insurance policies and prices online, and probably ask their parents a question or two and then press click. That’s how it works for young social media users.

With younger generations reliant upon social media as their favored form of communication, the future will most likely include more direct selling to end-user customers via these new distribution methods. Insurance companies should be quick to implement new programs that incorporate

•     text messaging for fast responses to a company text service;
•     social media inquiries from hashtags about seeking insurance;
•     answers to Facebook page inquiries;
•     using smartphone apps to allow for mobile sales.

These marketing initiatives would help bring the insurance company closer to its users and help to lower their overall costs of printing and mailing costly pamphlets and marketing materials to people’s homes.

Other tips that emerge for insurance companies using social media come in the way of smartphone apps. One look around Android Zoom and you’ll see that insurance apps are plentiful for consumers to use in case of claims or car accidents. One growing space is Insurance companies creating apps with social media that could enable claimants to file claims immediately after an event. Photos taken on the spot could be submitted through an app, and payments could be directly credited to the claimant’s account.

The future is here and now. Some insurers are already moving in this direction, others are hesitant about such a sudden change in company practice, and others will likely be slow to work with social media as a preferred communications voice. Those companies may not exist in future years, so they should definitely look into social media to communicate/connect with their customers.

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