Social networks have exploded
onto the world as a revolutionary way of communicating, but one
most life insurers have yet to come to terms with. The CEO of
social networking consultancy Socialware provides Charles Davis
with insight into how a major US life insurer is tackling the
challenge head-on.

 

Life insurers, like other regulated
industries, find themselves in a bit of a bind when it comes to
getting on the social network bandwagon. They know they needed to
join LinkedIn, Facebook, and Twitter a long time ago, but there are
so many compliance nightmares associated with turning an entire
sales force loose on social networks that many insurers have yet to
take the plunge.

Chad Bockius, CEO of Socialware, an
Austin, Texas-based social middleware company, told LII
that a negative approach ignores one simple fact.

“Odds are good that some of the
insurer’s agents are already on social networks anyway, in direct
contravention of corporate policy. They are living their lives on
these networks, so surely they are going to want to conduct
business on them as well.”

Socialware’s own research shows
nearly 40% of insurance agents use social media, whether their
company allows it or not.

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Do what they
must

“They [agents] do what they have to
do to grow their business, and for many of the agents, LinkedIn is
so organic, so much a part of their day, that they never gave much
thought to whether or not there was a policy to violate,” Bockius
stressed.

That is how Socialware started,
Bockius explained: getting financial services comfortable with the
power of social media. Socialware does all the heavy lifting,
specialising in providing the required monitoring, filtering, and
archiving for compliance control.

“We understand that it’s a bit of
new frontier [for insurers], and so we created a set of tools to
get them started in a product-safe way,” he said. “We want to make
it easy to use social media to find new prospects and grow the book
of business.”

One of Socialware’s newest clients
is the Guardian Life Insurance Company of America, one of the
largest mutual life insurance companies in the US. Guardian Life
plans to phase in access to social media, starting with the largest
and most technically-savvy producers and then broadening access to
others.

Bockius said part of the process
for Socialware will be training those staff who are granted access
on acceptable communications and behaviour for online media. That
training will be repeated as Guardian Life gains experience and
revises its policies.

Commenting on Guardian Life’s
decision to formalise social networks, the insurer’s chief
marketing officer Steve Holstein said: “My vantage point is this is
a medium that is here, and it’s only going to grow in proportion
and prominence. It is slowly but surely hitting every
industry.”

 

Gaining
momentum

Social movement is gaining
momentum: US investment bank Morgan Stanley recently announced it
will allow its advisors to use LinkedIn and Twitter from June 2011,
making it the first large financial management group to do so.

Like most insurers, Guardian Life’s
agents have been limited to having relatively static profiles on
services such as LinkedIn, with the text pre-approved by the
company’s compliance department, and could not participate in
online discussions.

But things are changing, as
Socialware works to train insurers on how to use social networks to
prospect and generate leads. The clarity of the Financial Industry
Regulatory Authority’s (FINRA) guidance for social media, issued in
January, certainly helps, Bockius said, by green lighting the
industry and enunciating clear standards.

FINRA’s rules treat common
activities like creating a profile or receiving an endorsement as
advertising, subject to tight regulatory compliance reviews. Even
the most routine comments and status updates need to be archived as
correspondence, like email, Bockius said.

“It’s complicated, but now with the
FINRA guidance as best practices, we can move forward,” he said. “A
lot of agents are independent business people who also sell
FINRA-regulated products, so for life insurance, FINRA serves as
the standard.”

Socialware employs three separate
solutions to get insurers on to social media. Everything starts
with Socialware Insight, an intelligence service that allows them
to get started with a policy template, resources to make decisions
on what to block and what to allow, and training for end users.

Compliance and moderation is
handled by the company’s Compass product, which allows the insurer
to dial up the appropriate level of compliance. For sales and
marketing, there is Socialware Voices, driving leads for the sales
channel to the sales force, by pushing content from industry
thought leaders and tracking the results. Insurers can provide
pre-approved content to users who select what content is most
relevant to their contacts.

Socialware manages social media
participation using a combination of techniques, including proxying
user connections to social media sites and using application
programming interfaces to gain the access it requires to monitor
and manage message and comment streams on sites like LinkedIn and
Facebook.

That way, the insurer will have the
security of knowing it can subject posts to pre-approval as
necessary, monitor a user’s overall participation on social sites,
and archive messages it might have to produce for regulatory
review.

 

State Farm also joins
in

Another social middleware provider,
Hearsay Corporation, is working with the insurer State Farm. Last
year, State Farm noticed a growing number of their nearly 18,000
independent agents were beginning to interact with customers and
prospects on social networking sites such as Facebook, LinkedIn and
Twitter. Recognising the need to both address compliance risk and
tap into the tremendous marketing opportunity on social media,
State Farm has deployed Hearsay Social to thousands of agents,
requiring that any agent who wishes to be on social networking
sites use Hearsay Social to access these sites.

Social networks are the future for
lead generation and service contact, Bockius said. An agent with a
carefully crafted presence can monitor clients for life events like
marriage, new jobs and babies more easily than ever, as Facebook
amply demonstrates.

“Smiling and dialling is a thing of the past,” Bockius said.
“The goal now is what we call ‘scalable intimacy’ – using social
networks to get more people than ever, more intensely than ever
before.”