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Insurers and the Web 2.0 Landscape

Featuring Karlyn Carnahan, Novarica

Posted on 16 Dec 10

This week I spoke with Karlyn Carnahan, CPCU, and principal at Novarica’s insurance practice, about Web 2.0, the progress insurers are making on the various platforms, and the different issues to consider when engaging in social media and networking. Novarica is an analyst firm that provides information, insights, and perspective on markets, operations, and technology to financial services and insurance executives. The Novarica Insurance Technology Research Council is a community of over 200 CIOs who respond to surveys and provide information on relevant and timely technology issues.

As a principal at Novarica, Karlyn focuses on e-business, marketing, and IT planning. Her career includes serving as Vice President of Marketing, Fireman's Fund commercial lines division, where she successfully launched multiple new products, expanded online customer self-service capabilities, and took a leading position in formulating IT strategy. She also served as Global Industry Manager for Sun Microsystems, and Senior Vice President of Product Development for InsWeb.

Annie George (AG):
Let’s provide a quick snapshot of Web 2.0 in order to put it into context in terms of what’s being done on the carrier side in this area.

Karlyn Carnahan (KC): “To understand Web 2.0, let’s take a look at Web 1.0, which was a one-way communication platform in which web designers developed features and websites they considered most appropriate. Insurers for the most part included marketing materials on their sites, never really having a handle on the make-up of their audience. They delivered what they thought people wanted. The only feedback insurers received was limited to focus groups.

“What Web 2.0 technology did was provide a two-way communication vehicle. Not only does the audience now have the ability to talk directly to insurers but they also have the ability to talk to one other. What’s more, this conversation is taking place whether or not someone is listening. It’s a different way of getting information, which requires different ways of using it.

“When we think of Web 2.0, we think of it as delivering four types of technology: blogs; micro-blogs, such as Twitter and Yammer; social networking, such as Facebook or LinkedIn; and user-generation content, such as YouTube videos and questions/forums you find on LinkedIn.

“Many carriers initially were hesitant about using Web 2.0 and social media as they believed only the very young were engaging in it. But, in fact, over 60% of the silent generation (age 64+) is online buying merchandise and services, conducting banking transactions, and accessing financial information. Further, individuals are not the only ones embracing Web 2.0. Businesses are using social media. A recent study of business usage of social media shows that 69% of respondents are attending webinars and listening to podcasts. Sixty-two percent are visiting company pages on social media sites and 55% are searching for information on these sites. And 29% are using Twitter to find business-related issues. This tells us that social media is being accessed by the young, old, and business. It’s an amazing opportunity for insurers to utilize this technology to communicate with their customers in a way they haven’t before.”

Karlyn underscores that what’s critical in implementing Web 2.0 is that you align and integrate what you’re doing on these platforms with your overall company marketing and branding strategy.

AG: What are carriers doing in the Web 2.0 space?

KC: “Carriers are using Web 2.0 in a variety of ways. Some are using it to establish an emotional connection; others are creating loyalty programs with their customers. Allstate, for example, has its Good Hands Community, a forum where customers can ask questions, get advice and exchange tips and stories and interact with each other. Other companies are using social networking for marketing and branding. Progressive has Flo; and Geico has the gecko and the caveman on Facebook.

“Several insurers are using LinkedIn groups to connect with alumni and tap into their expertise. LinkedIn lets you find these employees easily.”

When discussing Twitter, Karlyn acknowledges that many still don’t ‘get’ it. Yet with over 80 million tweets a month, she says this technique can’t be ignored. “Think about tweets in the context of your overall strategy. There are a number of ways to use Twitter. You can relay a problem and present solutions with tips (for example, last year State Farm posted a tweet about the rise in vandalism during Halloween and urged homeowners to park their cars in their garages), provide links to your website, announce products, find something positive that someone has tweeted about your company and re-tweet it. And, conversely, find the negative comments about your firm, your industry, and intervene. Reputation management is a very important piece of social networking. The reality is that the conversation is happening on Twitter whether you’re involved in it or not, just as it does outside of social media. The opportunity here, however, is that social media gives us the ability to intervene and spread what we want where we want.

“Additionally, if you have an agency-focus strategy as a carrier, you should be tweeting. Tweet about relevant issues to agents, such as E&O exposures and product announcements and enhancements, and link them to selling tips and articles.”

Karlyn also explains that tweets help with higher search ranking on Google, Yahoo, Bing, etc. “If you’re tweeting and someone types in a search term about a particular issue, your tweet may show up when your website may not,” says Karlyn.

AG: Many in our industry are now blogging. What are the benefits to blogging?

KC: “Many insurers blog to communicate with agents and brokers, some have blogs that are focused by industry and write about trends, for example new developments in manufacturing or product recall. Blogging helps to keep content fresh and by doing so you increase your search engine exposure. If your content changes frequently as it does with blogging, Google is “calling” you more often. Blogging also helps with Search Engine Optimization (SEO) as you can embed links within your blog that connect to your website which helps to strengthen your image.”

The challenge, Karlyn explains, is that you need someone to write the blog and manage all comments. But this is not always necessarily the case. For example, Progressive has a number of blogs on its website that aren’t based on original content. The insurer purchases the content, ensuring that it’s relevant and in synch with its overall marketing strategy, and then sources the supplier of the content on the blog.

AG: How are insurers using user-generated content to help drive traffic?

KC: “User-generated content is when other people are posting content. Think in terms of forums and YouTube. Individuals are posting about other organizations or commenting on other people’s comments. There has been a significant increase in user-generated content usage by carriers over the last year or so. For example, as part of Liberty Mutual’s Responsibility project, the insurer posts videos about ethical situations or questions, and visitors comment on them. The whole goal is to get people thinking about being responsible. It helps drive traffic to the site, and generates a lot of SEO.

“YouTube is a great example where you can post commercials, training videos, and videos others have made on your own channel. Again, some of the value in this is SEO. If you’re a small company it’s difficult to get on the front page of a Google search, and most people don’t search past the third page. The goal then is to get your company listed on one of those top pages and video content helps with this.”

AG: Insurers have a great deal of concern around Web 2.0. Let’s address this.

KC: “Security is a concern throughout the insurance industry. There is a great deal of caution over open social networks but, at the same time, companies are recognizing that this interactivity can really transform the way they communicate and provide service. We see a generation that is demanding more self-service. They want to be able to text to their service center from their mobile devices, to have an online collaboration tool, and to be able to ask questions. So while on the one hand we see certain concerns, we are seeing more people moving into the space.

“From a compliance standpoint, record retention is a big issue. The Department of Insurance may request a copy of all your marketing communications for 2010, for example. If you’re using applications such as Twitter and Facebook natively, it becomes difficult to be able to easily retain copies of all communication taking place on these platforms. It’s worth considering using an enterprise level software tool on your server, integrated with your own security and your own directory where you can control access to social media platforms and keep track of it all.

“Another important issue is privacy. This is not only true for the company’s own social media but also for employee Facebook pages, Twitter accounts, etc. What if an employee posts something about a claim he/she is handling? This could be considered a violation of privacy or defamation. Even individual comments on a company blog could be considered defamatory. You need to have a process in place to handle these comments.

“Additionally, there are human resources issues with job positions changing and evolving. An employee may have a job that now includes monitoring social media, which brings up issues regarding the use of social media during off hours. Or, what if one of your employees is tweeting about the company while driving and gets into an accident? Is this a Workers Comp case?”

Given these types of concerns, Karlyn stresses that insurers need to implement a solid governance policy, even if they aren’t actively choosing to use social media themselves.

“The first policy would focus on employee use,” says Karlyn. Determine which employees have a legitimate business reason to use social media, and then think about whether those employees are only to use it during business hours. You can’t really prevent them from using these networks, as they can do so with their iPhone or Blackberry, but you can put a policy in place. Then think about how you will monitor this activity.

“Also think about how you want your employees referring to your organization on their personal social networks. What can they say about your company? What can they say about their job? You need guidelines as to who can use social media on behalf of the company.”

AG: How do you enforce the guidelines you develop?

KC: “First determine who is responsible for managing the day-to-day activity on social media. Many companies put together a committee, which often includes a number of people representing Marketing, Human Resources, General Counsel, and IT. They typically implement processes that include assigning a manager to oversee all social media, determining how to prioritize and manage social media projects, and deciding at what level the effort should be governed. For example, it’s unlikely that General Counsel will review every single tweet. Twitter happens too quickly, so there comes a point you have to determine what needs to be reviewed by the GC and set up rules. For example, Allstate’s policy is not to tweet about the product, which eliminates many compliance issues. Companies are putting together standards as to what can and can’t be tweeted about. They are looking at: What is our content standard, presentation standard, who reviews each platform, and how will we manage customer feedback?

“In terms of enforcement, it’s very difficult to monitor each employee’s use of social media. What works better for most companies is to issue a written policy and make sure employees review the policy and sign it. Then plan for the worst event…how will we react if private information is disclosed on an employee’s social networking site? What will we do if a negative tweet goes nuclear? What will we do if defamatory comments are posted on our website? A big part of governance is to think of the five or ten worst-case scenarios and plan your response.”

AG: Lastly, how do companies know their Web 2.0, Internet strategy is working?

KC: “Metrics should be aligned with your actual goals. If your goal is to drive traffic to your website, that is what you’ll be analyzing. How much traffic did I get from Facebook, Twitter, YouTube? How many unique visitors came to the site? If I’m looking at brand management, how many individuals are following me, how many are ‘friend-ing’ me, how many lists am I on? Some insurers get very precise about this, with segmentation of their followers. A really good follower is someone who has a lot of his/her own followers because they retweet, ‘like’, and get more visibility. If the goal is relationship building and establishing loyalty, then look at how many people are commenting on your blog and Facebook, and how many are retweeting.

“Companies that are ready to delve into social media but still cautious should secure their domains for Twitter, Facebook, and LinkedIn, if they haven’t already done so. You don’t want someone setting up a page under your company name over which you have no control. Be sure to evaluate the role of social media within the context of your overall marketing strategy. Figure out what you want to do before you figure out the techniques and platforms you want to use. Identify the compliance issues that will affect your organization, create processes and policies. And think about governance processes that include employee personal use of social media, and putting together a plan on the management, communication, and enforcement of the policies. Then determine the metrics you need to measure success and how you will obtain these metrics.”