Although 70% of insurers worldwide currently use social media, only some insurers have integrated social media with customer relationship management, according to the Timetric report, Insurers’ engagement with Social Media, which is available at the Insurance Intelligence Center.
The report said insurers across the world are increasingly using social media across their businesses, as part of product development, sales and marketing, customer service and claims management.
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Nevertheless, the report argued there is further scope for use of social media analytics in product development, underwriting and fraud detection, as to date only mature insurance companies have been able to use advanced technology to utilise social media data.
This is probably due to the complexity involved in using artificial intelligence, predictive analytics and data mining with the vast pool of data available on social media platforms. Skills shortages, expertise and technology spending also remain major challenges.
The report explained that a person’s social identity can be determined by their activity on social media platforms and other integrated online forums.
Underwriters can therefore gain important insights in terms of risk by studying individuals’ patterns of behaviour when interacting on social networking sites, communicating on public forums or purchasing items online.
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By GlobalDataE-commerce websites such as Amazon and eBay are linked to social media platforms such as Facebook and Twitter, providing options to like products or share product information, as well as an opportunity to understand individuals’ buying patterns.
Social graphs
Social graphs are another important tool in risk profiling and assessment, said the report.
Social graphs are based on people’s connections with others, how individuals are linked, and who follows whom.
As well as assessing risk based on social networking behaviour, social graphs can also help with fraud detection.
The report said that as social media users spend more time online, a vast pool of social media data is being created, defining individuals’ social identity. Scores for parameters such as social identity and social graphs can be fed into underwriting models to quantify the risk associated with a specific person.
Overall, to get the most from social media, insurers must integrate their social media strategies with customer relationship management (CRM), to automate processes and systems and enable insurers to monitor social media data.
The report says: "Insurers must improve their IT systems and rethink how their business integrates into their technology platforms.
"Companies require a high-level IT environment to maximize returns from social media, and must combine customer data and products and services into a single IT-based system.
"Companies must invest in IT to deliver effective customer support, improve CRM capability, and use high-end analytical tools to understand consumer behaviour. "
Read an expanded version of this article in the April issue of Life Insurance International .
