Demystifying Social Business Trends for the Insurance Industry

• Cognizant 20-20 Insights

Demystifying Social Business Trends
for the Insurance Industry
Making the leap into social business promises increased demand,
customer loyalty and returns for insurers.

Executive Summary Insurers Go Social
Within a relatively short time, social networking Businesses usually benefit to the extent that they
has evolved as the preferred networking hub for stay close to customers. While industries such as
millennials. As a result, maintaining a presence retail and hospitality were quick to understand
on the social Web and staying connected with the the implications of social media, insurers joined
tech-savvy community has become imperative the social bandwagon comparatively late. Insur-
for business brands. ance carriers have marked their presence on
the social Web by creating Facebook fan pages.
Business enterprises are witnessing the emer- A similar presence on Twitter, LinkedIn, YouTube,
gence of social business, which encompasses blogs and other social media channels supple-
collaborating and engaging in conversations in ment their traditional marketing campaigns to
B2B, B2C and B2E touchpoints. Social business improve their brand equity.
largely comprises social media (external facing)
and social enterprise (internal facing), shifting Customer conversations on social media
the paradigm from a transactional model to an generate a wealth of information that can supple-
engagement model. ment traditional sources of information. These
conversations range from negative feedback
Traditionally, the insurance industry has relied on about a recently launched product to opinions
strong networking and trusted relationships. By that can drive new product innovation. Some
transforming into social businesses, insurers can insurers have engaged in these conversations
tap significant opportunities that enable them to and analyzed them to derive deeper insights. This
generate more demand, win customer loyalty and has helped improve service offerings, influenced
maximize returns. buying behavior and enabled prudent decisions
in underwriting and claims settlement. As they
This white paper examines the implications of
continue to engage with customers externally,
social business in the insurance industry, high-
some insurers have also begun to invest in devel-
lights the popular social avenues and innovative
oping an internal culture of collaboration in their
trends that are revolutionizing the industry and
business units, and among their employees and
presents our point of view on future trends.
partners.

cognizant 20-20 insights | january 2013

The social business avenues that insurers should Insurance carriers are keen to promote sales
leverage include but are not limited to: through the social graphs of customer communi-
ties. New York Life8 believes that 60% of Facebook
• Social media marketing. fans are prospects. American Family9 believes its
• Social media listening/monitoring. social media outreach strategy is spurring sales.
It claims to have anecdotal evidence of agents
• Social media analytics. who have sold hundreds of policies through their
• Social enterprise. Facebook usage. Farmers10 has taken innovative
steps to equip its agents to generate leads through
• Social design. social media platforms. Foremost Insurance,11
Social Media Marketing which is part of Farmers Insurance Group, has set
Facebook1 has more than one billion active users, up a dedicated Web site — Foremost Social Media
closely followed by Twitter with more than 500 Suitcase — where it hosts educational material to
million users. Over 300,000 businesses have familiarize its agents with the use of social media.
Facebook pages. Around 50% of social users are Moving one step ahead, Farmers12 also supplies
connected to brands, 36% content for agents’ Facebook pages. Facebook
templates with a full content library were success-
Word-of-mouth post content about brands, fully piloted, attracting more than 25,000 fans to
advertising of the 40% of products in co-cre-
ation
take part
and, more the 300 participating agents’ pages.
past has given way important, 78% are influ- Digital marketing trends are set to drastically
to testimonies and enced by other social users’ change the way insurance products are marketed
feedback on social recommendationsdecisions.
making purchase
when
and sold. The onus is on carriers to equip their
agents with adequate technology and training
channels. In a recent survey conduct- so that they can meet the expectations of social-
ed by Kasina,2 about 85%
savvy customers.
of respondents said they have seen increased
brand awareness on social media platforms, 67% Real-time relationships nurtured in social media
have seen increased engagement with clients and will soon become the de facto networking
prospects and 58% said social media has led to standard to promote brands, retain clients and
increased Web site traffic. The top 10 insurers gain prospects through client referrals. With the
have already managed to attract 11 million rich sharing options available on social channels,
Facebook fans. they present numerous opportunities for carriers
and agents to turn their customers into brand
Insurers no longer have the choice of staying off
ambassadors.
social media. Word-of-mouth advertising of the
past has given way to testimonies and feedback Social Media Listening/Monitoring
on social channels. Customer sentiments voiced
Most insurers view social media predominantly as
on these networks essen-
a marketing vehicle. Effective digital marketing
With the rich sharing tially decide the fate of the can no doubt help capture customers’ attention.
brand in the market. GEICO3
options available on and Progressive4 have led However, social media can do much more. At any
social channels, they the way in digital market- given time, there are several conversations hap-
pening across social channels. Monitoring these
present numerous ing through their YouTube conversations can bring enormous benefits to the
commercials where their
opportunities mascots promote their various links in the insurance value chain. Getting
for carriers and brand. Players such as alerted about negative sentiments and taking
suitable remedial action is extremely important.
agents to turn their All State,57 State Farm6
and AVIVA have taken it
customers into brand further by endorsing edu- While carriers could monitor whether the
customer reflects positive or negative sentiments
ambassadors. cational videos and spread- about their brands, insurance agents could use
ing awareness about safe the profiles of customers publicly visible on social
driving, disaster preparedness, etc. This serves networking sites to understand lifestyle or monitor
the dual purpose of promoting their brand inter- their life events and utilize that data for lead
ests and also reducing loss exposure that would generation. Insurance carriers can understand
otherwise result in claims payments. market perceptions and customer expectations.

cognizant 20-20 insights 2

They can acquire immediate feedback about their from social platforms qualifies as one of the
products and services, improve the quality by prominent data sources to be fed into a fraud
addressing the gaps in coverage or service provid- detection engine. The structured and unstruc-
ed and stay ahead of the competition. Listening tured data must be unified to generate collec-
and engaging in conversations also allows the tive insights. Predictive models must be built not
carrier to provide enhanced customer service. only to scrutinize the after-
PEMCO13 uses a platform from Radian6 to monitor effects during claims, but Insurers should employ
sentiment in social postings. Twitter acts as an effec- to proactively analyze the
tive listening mechanism to facilitate a quick feed- risk exposure while accept- the right strategies
back loop. Progressive14 has employed dedicated ing, modifying or rejecting to decide on their
professionals who monitor Twitter and respond to coverage for a prospect. objectives and then
customer queries around the clock.
Also, by gathering and ana- choose appropriate
Celent analyst Michael Fitzgerald15 observes, lyzing the data from social monitoring platforms.
“Leading organizations are beginning to leverage feeds, insurers can create
social media monitoring as an operational tool. customized products for
These companies will know more about their specific target audiences. USAA17 has taken a
customers at a very specific, actionable level by significant step by engaging Bazaarvoice to
tracking social media posts.” read and categorize the reviews/ratings that
are provided by its custom-
Insurers should employ the right strategies to ers on the official customer In a classic case,
decide on their objectives and then choose appro- Web site. USAA processes
priate monitoring platforms. A sentiment analysis and publishes these aggre- a customer who
tool needs to include context in evaluations. gated ratings and authen- faked illness to claim
Selection of an appropriate domain and customer tic reviews against its workers’ compensation
business-specific taxonomy plays a key role in products, which attracts
interpreting sentiments for valuable feedback new prospects. benefits was exposed
about market trends, recently launched products via Facebook profile
and competitor brands. Engaging in the right Given that there is signifi-
conversation can bring greater credibility to the cant noise that needs to
pictures that
brand and help build customer loyalty and trust. be filtered, correlating the suggested otherwise.
data available from different
Social Media Analytics sources becomes crucial. Also, there are some
Social media analytics involves mining unstruc- individuals who could play an important role in
tured data to generate business intelligence shaping conversations. It is extremely important
insights for the brand. It can help insurers make to find these influential sites/persons and priori-
prudent decisions by measuring the performance tize focus accordingly. With more cutting-edge
of their brands and associated social media cam- platforms and tools being developed in this space,
paigns. Two areas within the insurance value we expect correlation engines in addition to
chain where analytics can play a significant role sentimental analysis and integration of social
are risk segmentation and claims fraud detec- data into CRM systems and warehouse marts.
tion. Insurance carriers could leverage social data
to identify new rating factors or modify existing Social Enterprise
factors based upon the lifestyle changes evident Social collaboration within the enterprise enables
in prospective clients’ social networks. This could the stakeholders to collaborate through virtual
potentially expand or minimize the risk exposure communities, build trusting relationships and
related to prospects or customers. An actuary discover/disseminate knowledge. For example,
could use this data in addition to other data collaboration between underwriters and agents
sources to make sound pricing model decisions. could ease the underwriting of new business.
Access to the latest underwriting guidelines, sup-
Similarly, the customer’s social profile data could plementary data and expert guidance could be
help detect fraudulent claims. In a classic case, added advantages. Similarly, the ability to share,
a customer who faked illness to claim workers’ upload and comment on digitized claims data,
compensation benefits was exposed via Facebook improved information sharing between a claims
profile pictures that suggested otherwise.16 Data adjuster and the claims field location representa-


tive, and the ability to collaborate with the legal Social Design
department could result in shorter claims cycles.
Social design is a new way of visualizing applica-
Departments such as finance, legal and HR within tion design that puts social experience at the core.
an insurance organization would be equipped to Facebook is a classic example, incorporating core
make informed decisions after discussion with elements of social design such as identity, con-
other units that need not versation and community. Facebook establishes
social design as a strategy that builds upon users’
Enterprise collaboration necessarily be co-locat- trusted communities, encourages conversations
could promote ed. The regulatory and
compliance department between them and ultimately creates a stronger
innovation through the could actively dissemi- sense of identity for everyone. This strategy
revolves around utilizing community to person-
participation of various nate information on the alize user experience, building conversations to
departments such as latest toregulatory proce-
dures varied stakehold- effectively listen and share data and curate an
marketing, sales and ers through blogs/activity identity for themselves. These principles can be
applied while designing core insurance systems.
distribution, business streams that can aid the By modeling the system to adopt a social mindset
units, operations, underwriting in or claims
department evaluating and driving social business by design, the benefits
research team, legal, the customer application. could be enormous for the various players in the
insurance value chain.
finance, customer Enterprise collaboration
services and IT in the could promote innovation
through the participation
For example, based on past loss history the
designing of a new of various departments system could recommend that an underwriter
reject a prospect’s application. The underwriter
product. such as marketing, sales could be referred to an actuary who has worked
and distribution, business
on a similar actuarial assignment. A claims
units, operations, research team, legal, finance,
adjuster could gain access to court judgments
customer services and IT in the designing
involving similar coverage disputes. The system
of a new product. Better alignment between
can bring up references to policies where similar
IT and business can be achieved through
loss exposures were assessed. Potential cross-
better collaboration.
selling opportunities can be notified. Products
BUPA’s18 enterprise collaboration platform, BUPA and coverage suitable for a customer can be high-
lighted. Recommendations and product reviews
Live, has reported an estimated cost savings of
by the customer’s friends can be pulled up. The
$305,746 for 700 users, overall improvement
system could provide FAQ responses to custom-
of sales by 10% (of which 2% is attributed to
ers to enable self-service. Recommendations for
internal collaboration) and a 2% increase in con-
suitable pricing models or for projecting near-
nectedness leading to a 10% rise in its satisfac-
accurate claims loss reserves can be provided.
tion index. Nationwide19 has been successful in
fostering a culture of transparency, better inno- This design is not just restricted to internal
vation, and knowledge flow within the organiza- facing core systems but can extend to customer
tion. Swiss Re’s20 collaboration site, Ourspace, service applications hosted on a platform such
facilitated cross-functional collaboration and idea as Facebook, thereby leveraging the inherent
generation on varied business themes with both features of social design. When the prospect
global and regional focus. logs into Facebook and accesses the Get Quote
App for an auto product, the app provides him
Enterprise collaboration brings with it a host of
valuable insights such as “2,000 visitors viewed
benefits such as increased productivity, a greater
this app, 250 liked it, 75 of them have opted for
sense of belonging, rapid access to knowledge
this additional coverage, 50 of them have saved
and faster time to market at reduced operation-
$20 by combining their auto and home policy, five
al costs. We believe that insurance companies
of your friends recommended it.” The app could
should focus as much on strengthening internal
list the agents who reside nearby based on the
collaboration initiatives as on external initiatives.
zip code entered or suggest agents who have
It is important to crowdsource the collective intel-
serviced the policies of friends in the prospect’s
ligence of employees and partners in order to
social graph. The app can effortlessly function as
understand and serve customer needs better.
an effective social media marketing tool that gen-
erates leads.


Social design is challenging the design of tradi- the process value chain. The potential of social
tional systems and should dramatically accelerate business is vast and could generate immense pro-
operational efficiencies. Early adopters are sure ductivity gains if “right use cases” are identified
to benefit greatly, in our view. across the insurance value chain.

Social Business: Innovative Trends For example, with the Insurers such as
right mix of social design
Insurers such as USAA, Travelers, New York
21 22

and collaboration, the
USAA, Travelers, New
Life23 and MetLife24 have started using their
LinkedIn sites to recruit employees. State Farm25 commercial underwriting York Life and MetLife
got started in social media when it set up a blog process, which involves have started using their
extensive manual inter-
to find New Orleans-area employees and agents
vention and complex
LinkedIn sites to recruit
who could not be located after hurricane Katrina.
Within 24 hours, the blog enabled them to locate rules processing, can be employees.
every agent and employee. AXA UK26 launched streamlined to eliminate
a snakes and ladders-style game on LinkedIn duplication of data, efficiently manage task work
to encourage small businesses to consider the flow, leverage community expertise and carry out
risks they faced and the kind of insurance they predictive analysis. The system could be equipped
needed in order to thrive. Farmers27 approached with tools to virtually connect from anywhere,
social gaming as an opportunity and partnered anytime — thus providing an integrated view of
with Zynga to promote brand awareness through the submission documents associated with a
Zynga’s Farmville, which is reported to have more prospect/policy. This, in turn, will help improve
than 80 million users. Humana,28 a leading health operational efficiencies at a lower cost. Social
insurer, has set up the Humana Innovation Center means of doing business within an enterprise
to reach out to consumers in a novel way through brings all the stakeholders on the same page to
games, tools and blogs aimed at staying healthy. achieve more successful
CNA‘s29 special investigation unit is aiming to innovations in introducing Social and mobile go
mine social network data to identify relationships new products/services in hand in hand, as most
an agile fashion, thereby
reducing time to market. social networking
between parties to a claim that might not be oth-
erwise apparent.
It also allows rapid access applications are
InsurEye30 is a Canada-based independent online to customer feedback to accessible through
service company that collects, validates and derive deeper insights
analyzes insurance experiences of real people. and gain competitive mobile devices.
InsurEye is a great example of social benchmark- advantage.
ing because all the data is generated from the
consumer side and across various insurance pro- Social commerce and F-commerce (Facebook
viders. An opportunity to create a marketplace commerce) rely on social interactions and rec-
that would connect car owners with other people ommendations to assist in online purchase of
in need of a car is catching up. People in need of products/services. Facebook applications could
a lawn mower or chain saw might find a friendly serve as a prime channel for offering quotes and
neighbor to borrow or rent from on social net- selling insurance products in the near future. The
working sites such as HeyNeighbor.com.31 confluence of social analytics and big data will
aid in the generation of vital business intelligence
Twitter “bots”32 that automatically respond to insights for insurers, opening up new opportuni-
certain triggers can be useful. Imagine the pos- ties and expanding social business.
sibilities if every new home buyer within 50 miles
of an agency location receives helpful home- Social and mobile go hand in hand, as most social
insuring tips within minutes of their purchase. networking applications are accessible through
mobile devices. The other layers such as analyt-
The Future of Social Business ics, content management and business process
for Insurers management have also started including social
aspects into their design. Though there are not
Social business is here to stay. The horizons of
many mature models available in the market
social business are yet to be explored or exploited
to measure social ROI, Google Analytics33 has
by insurers to their full potential. Insurers have
recently announced that it will help identify the
started to move past the linear process-driven
full value of traffic coming from social sites and
mindset to exploit collaborative intelligence in


measure how they lead to direct conversions. Insurance firms show resistance in adopting social
Products such as Hearsay Social34 have taken business models, fearing regulatory, compliance
a giant leap in integrating social networking and legal implications. By publishing social media
channels with back-end systems, allowing organi- policy guidelines and selecting products that
zations to manage customer relationships, gather enable compliant use of social media, insurers
and disseminate content, measure and garner can mitigate these risks to a great extent. Insurers
insights through in-depth analytics and minimize must identify the appropriate business cases and
state insurance/FINRA-compliance risks. ensure that their social strategy is closely aligned
with their organizational business objectives.
Conclusion Once the strategy is in place, with the right choice
As is evident, social business is more holistic than of partners and products, insurers can redesign
social media. Rather than existing in silos, the their communication ecosystem, build stronger
social mindset should be adopted by every layer relationships and realize tangible gains.
within an enterprise. We believe the future of
work for insurers revolves around social business.

Footnotes
1
http://en.wikipedia.org/wiki/List_of_virtual_communities_with_more_than_100_million_users
2
www.propertycasualty360.com/2012/05/04/toops-scoops-insurers-find-social-media-lacks-roi
3
http://www.youtube.com/user/GEICO
4
http://www.youtube.com/user/progressive
5
http://community.allstate.com/community/allstate_blog?view=blog
6
http://www.statefarmyab.com/
7
http://www.aviva.com/investor-relations/news/item/uk-aviva-launches-magic-money-social-media-cam-
paign-14475/
8
http://gillin.com/blog/2011/08/social-marketing-wisdom-from-the-insurance-industry-%E2%80%93-
really/
9
http://www.propertycasualty360.com/2012/05/01/reach-out-and-touch-someone
10
http://www.dmnews.com/qa-ryon-harms-director-of-social-media-farmers-insurance/article/220750/
11
http://www.farmers.com/2_10_11_SocialMedia.html
12
http://www.zurich.com/internet/main/SiteCollectionDocuments/insight/personallinesfinal.pdf
13
http://www.webassurance.org/insurers-leveraging-social-media-to-improve-customer-acquisition-and-
retention
14
http://twitter.com/#!/Progressive/
15
http://www.celent.com/reports/mining-chatter-optimizing-social-media-monitoring
16
http://articles.latimes.com/2011/jan/25/business/la-fi-facebook-evidence-20110125
17
http://www.bazaarvoice.com/blog/2010/05/13/forrester-features-usaa-as-social-media-innovator/
18
http://www.jivesoftware.com/customers/case-studies/bupa
19
https://www.yammer.com/customers/casestudies/nationwide/
20
http://www.jivesoftware.com/customers/case-studies/swiss-re
21
http://www.linkedin.com/company/usaa/careers?trk=tabs_biz_career
22
http://www.linkedin.com/company/travelers/careers?trk=tabs_biz_career
23
http://www.linkedin.com/company/new-york-life-insurance-company/careers?trk=tabs_biz_career
24
http://www.linkedin.com/company/metlife/careers?trk=tabs_biz_career


25
http://gillin.com/blog/2011/08/social-marketing-wisdom-from-the-insurance-industry-%E2%80%93-
really/
26
http://blogit.realwire.com/AXA-launches-LinkedIn-game-to-help-businesses-prepare-for-the-future
27
http://windmillnetworking.com/2010/10/20/farmers-insurance-social-media-marketing-case-study-utiliz-
ing-farmville-for-facebook-brand-awareness/
28
http://www.convergys.com/pdf/campaigns/Forrester-Innovation-In-Health-Insurance.pdf?TRID=1
29
http://www.insurancetech.com/claims/232200359
30
http://www.financefox.ca/insurance-gets-innovative/
31
http://www.insurancejournal.com/magazines/features/2012/03/05/238146.htm
32
http://www.insurancetech.com/distribution/232700232
33
http://analytics.blogspot.in/2012/03/capturing-value-of-social-media-using.html
34
http://hearsaysocial.com/industries/insurance/

About the Authors
Akila Narayanan is a Manager with the Insurance Future of Work Group within Cognizant’s Insurance
Practice. She is a social business enthusiast and evangelist. Akila has vast experience in managing
complex and strategic projects for insurers. She is an avid blogger and specializes in enabling social
business for insurers. Akila is an electronics and communications engineer from the University of Madras
and holds a PMP, Associate in general insurance credentials. She can be reached at Akila.Narayanan@
cognizant.com.

Shyam Sundar Nagarajan is a Principal Architect with the Insurance Future of Work Group within Cogni-
zant’s Insurance Practice. He has vast experience in architecting and executing enterprise legacy mod-
ernization projects for insurance carriers. Shyam’s areas of interest include application architecture,
legacy modernization, Agile methodologies, SOA, GIS, LBS, LI, mobility and social. His current focus
areas include envisioning future of work for insurers with redefined application architecture. Shyam
holds a B.Tech degree from the Indian Institute of Technology – Banaras Hindu University and a master’s
degree in software systems from Birla Institute of Technology and Science, Pilani. He is an IBM-certified
Service Oriented Architecture Associate and TOGAF 8 Certified Enterprise Architect. He can be reached
at ShyamSundar.Nagarajan@cognizant.com.

About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-
sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry
and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50
delivery centers worldwide and approximately 150,400 employees as of September 30, 2012, Cognizant is a member of
the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing
and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

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Demystifying Social Business Trends for the Insurance Industry

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