Guest Post by: Jo Stratmann

In a recent report, Ernst and Young looked specifically at how social media be used in the insurance customer value chain.

Here’s a summary of the findings, with some of our own thoughts:

1. Research products

Customers are using dedicated price comparison sites in order to research insurance products. They’re also asking questions, through social media, to their connections and friends, seeking advice on things like the best car insurance company, or where to get the best deal.

Our suggestion: Insurance companies should use social media monitoring to listen to these conversation and find out what’s being said about their products. This will help to assess both the positive and negative perceptions behind the products and how this influences the research stage of the customer value chain. If they’re not being talked about perhaps this is an indicator that marketing and promotional activites need to be reassesed.

It may also be appropriate for some brands to establish Twitter and Facebook profiles in order to respond to the requests through social networks for more information about where to get the best car insurance etc. However this should be assessed on a brand by brand, interaction by interaction basis as some customers may resent hearing back directly from a brand and will see it as a hard sell.

2. Obtain quotes

Some insurers are using new technology, like iphone apps, to generate, buy and renew insurance quotes. An online research company targeting advisers has developed the country’s first app for life insurance quotes.

Our suggestion: Mobile device use is on the increase and insurers would do well to think about how they can enable their current and prospective customers to access price and data information  on the go. This could be particularly valuable for travel and car insurance companies.

3. Policy buying

According to Ernst and Young’s industry research, 90% of customers say peer recommendations are the most credible form of advertising.

Our suggestion: Reviews and recommendations from “people like me” play an integral part in the customer decision making process. A good review by an influential blogger, or a comment by a social media influencer who appeals to the consumer audience can be more valuable than thousands of pounds worth of advertising. By interacting and engaging with influencers, brands can build up their presence and appeal to their target audience.

4. Service policy

Social media allows insurers to interact and communicate with customers, and vice versa. This helps the insurer learn more about their customer’s needs and helps them educate about the best policies, the benefits of their current policies etc.

Our suggestion: Insurance companies need to assess the best way for engaging with their market and audience. The best way to do this is to come up with a social media management plan and a content strategy that is personalised, useful, relevant and targeted.

5. Lodge claim

Many insurers are building and piloting new applications to capitalise on the prevalence of mobile and app based communication to deliver information to claims handlers and policy holders. They’re also offering self-service portals where claims can be lodged quickly and effectively.

Our suggestion: Social media can help to disseminate useful information that could help to reduce claims. For example, travel insurers could provide useful advice about keeping valuables safe in hostile environments or extreme weather conditions. Claim handlers could also mine Facebook, Twitter and other social networks to assess the legitimacy of claims based on the data, comments and conversations of the claimant.

6. Renewal/Terminate policy

Customers mostly turn to websites to fulfill their renewal and termination needs, thus the same potential exists for insurers to use social media as a means to improve renewal numbers.

Our suggestion: One of the main benefits of social media is the potential to gather valuable CRM data. For the insurance industry this could be information like  renewal dates, policy types etc. If this information is gathered then engagement could revolve around not only acquiring new customers, but targeting them before their renewal date to encourage them to renew the policy, or change to a different one, rather than terminate.

Image courtesy of Ernst & Young

Original Post: http://www.freshnetworks.com/blog/2011/08/6-areas-where-social-media-can-add-value-to-the-insurance-customer-value-chain/