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Why Should Insurance Actuaries Care about Social Media? Until a few years ago my reaction to social media, apart from LinkedIn for managing my network, was “Who cares what I had for breakfast!” I am now a convert to the need to understand social media and the need to ‘be in it’ – for actuaries and insurance companies. This short article is not intended to be a ‘How to’ piece. There are plenty out there. This article is to show you why you and your insurance company should care about social media and to whet your appetite to learn more. Actuaries love stats and it is easy to find impressive social media stats. For example, there are 13 million Facebook users in Australia and if Facebook was a country it would be the third largest. But how about this one: a Facebook page created by a US General Insurance company has over 5.3 million likes – an insurance company! It is the Facebook page of Flo, the Progressive Girl <https://www.facebook.com/flotheprogressivegirl>. There is no great mystery or magic about social media – it is just brings us new ways to be social. Humans are social beings so it is no wonder we embrace new ways to communicate and connect so enthusiastically. For the individual, social media is about networking, collaborating, learning, sharing…and having fun. In this article, I will focus on what social media can mean for an insurance company. Social media has applications internally and externally. Corporate social media platforms such as Yammer are facilitating internal collaboration and helping to break down silos in some of the biggest companies. Many business use social media very successfully to attract and retain staff. It is important to have a social media strategy that is integrated in the overall corporate strategy. Not having a social media strategy is a strategy, just not a very good one. As with any strategy, it starts with defining objectives – what are you trying to achieve. This applies to the corporate and also to individuals. The most obvious uses of social media by business are branding and advertising. Even if you do not have a presence or voice on social media, your customers and potential customers will. Many people use social media to let the world know about bad consumer experiences. If nothing else, you must be monitoring and responding. Social media gives the consumer enormous power. You cannot limit this but you can harness this. Look at Flo, the Progressive Girl. Another interesting case study is Devitt, a UK insurer that specialises in motorbike and related insurance. It created an online community, www.keepbritainbiking.com . The insurer is now not just a company marketing to bike enthusiasts but an active participant in the community. An extension of branding and advertising is to customer service. Many businesses now see social media as an important channel and whilst there are many compliance and regulatory issues in the financial services industry, it is happening there as well. The only way to do this effectively is to be monitoring social media activity that mentions your brands. If you’re not convinced of the importance of this, check out www.servicerage.com/car-and-home- insurance and click on any of the companies to see what people are saying. Whilst not an insurance example, http://crowdsupport.telstra.com.au/ is an interesting example of how a business has embraced the power of the crowd to provide customer support. Whilst social media is about communicating, it is closely related to that other buzz word, big data. Think of the amount of information out there in cyberspace for clever insurance companies to harvest. Consider the case of a woman in Florida that told her car insurer that a hit-and-run had damaged her car. The woman then told her friends on Facebook that her daughter had caused the accident. The insurer’s investigators searched social media, found the post, declined the claim and the woman was convicted of filing a fraudulent claim. Yes, a disturbing story in many ways but a sign of things to come. Social media is changing personal and professional communications. I agree, not always for the best but it is not a fad so rather than resisting, I have decided to embrace it and I hope that after reading this article you will too. Connect with me on LinkedIn and Twitter (@stephenhuppert ) to continue the conversation and share your stories. Stephen Huppert <[email protected]> Partner Deloitte Actuaries & Consultants

Why should insurance actuaries care about social media?

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Why Should Insurance Actuaries Care about Social Media?

Until a few years ago my reaction to social media, apart from LinkedIn for managing my network, was “Who careswhat I had for breakfast!” I am now a convert to the need to understand social media and the need to ‘be in it’ –for actuaries and insurance companies. This short article is not intended to be a ‘How to’ piece. There are plenty outthere. This article is to show you why you and your insurance company should care about social media and to whetyour appetite to learn more.

Actuaries love stats and it is easy to find impressive social media stats. For example, there are 13 million Facebook users in Australia and if Facebook was a country it would be the third largest. But how about this one: a Facebook page created by a US General Insurance company has over 5.3 million likes – an insurance company! It is the Facebook page of Flo, the Progressive Girl <https://www.facebook.com/flotheprogressivegirl>.

There is no great mystery or magic about social media – it is just brings us new ways to be social. Humans are socialbeings so it is no wonder we embrace new ways to communicate and connect so enthusiastically.

For the individual, social media is about networking, collaborating, learning, sharing…and having fun. In this article, Iwill focus on what social media can mean for an insurance company. Social media has applications internally andexternally. Corporate social media platforms such as Yammer are facilitating internal collaboration and helping tobreak down silos in some of the biggest companies. Many business use social media very successfully to attract andretain staff.

It is important to have a social media strategy that is integrated in the overall corporate strategy. Not having asocial media strategy is a strategy, just not a very good one. As with any strategy, it starts with defining objectives –what are you trying to achieve. This applies to the corporate and also to individuals.

The most obvious uses of social media by business are branding and advertising. Even if you do not have a presenceor voice on social media, your customers and potential customers will. Many people use social media to let theworld know about bad consumer experiences. If nothing else, you must be monitoring and responding. Social mediagives the consumer enormous power. You cannot limit this but you can harness this. Look at Flo, the Progressive Girl.

Another interesting case study is Devitt, a UK insurer that specialises in motorbike and related insurance. It created anonline community, www.keepbritainbiking.com. The insurer is now not just a company marketing to bike enthusiastsbut an active participant in the community.

An extension of branding and advertising is to customer service. Many businesses now see social media as animportant channel and whilst there are many compliance and regulatory issues in the financial services industry, it ishappening there as well. The only way to do this effectively is to be monitoring social media activity that mentionsyour brands. If you’re not convinced of the importance of this, check out www.servicerage.com/car-and-home-insurance and click on any of the companies to see what people are saying. Whilst not an insurance example,http://crowdsupport.telstra.com.au/ is an interesting example of how a business has embraced the power of thecrowd to provide customer support.

Whilst social media is about communicating, it is closely related to that other buzz word, big data. Think of theamount of information out there in cyberspace for clever insurance companies to harvest. Consider the case of awoman in Florida that told her car insurer that a hit-and-run had damaged her car. The woman then told her friendson Facebook that her daughter had caused the accident. The insurer’s investigators searched social media, foundthe post, declined the claim and the woman was convicted of filing a fraudulent claim. Yes, a disturbing story inmany ways but a sign of things to come.

Social media is changing personal and professional communications. I agree, not always for the best but it is not afad so rather than resisting, I have decided to embrace it and I hope that after reading this article you will too.Connect with me on LinkedIn and Twitter (@stephenhuppert) to continue the conversation and share your stories.

Stephen Huppert <[email protected]> Partner Deloitte Actuaries & Consultants