It wasn’t long ago when the idea of using social media in the insurance industry sounded like science fiction. Insurance companies had made an attempt which didn’t get off the ground, and the prevailing view in the Insurtech industry was that social media data was too sensitive and insurers’ legacy systems were too arcane to make a social media distribution solution work.
A few years later, a lot has changed but there is so much more work that needs to be done. In contrast to the naysayers mentioned above, our investors, partners, clients and team have worked tirelessly to help more people get better coverage, by using social media analytics as an enabling force. Our technology has been used by Hiscox, QBE, MetLife and others, and the patent-pending technology has been awarded ‘Best Fintech in the UK’ by UKBAA, and ‘Best Insurtech’ by the Digital Insurer.
With all this behind us, one could argue that social media has already made its impact on the industry, but it’s our firm belief that we are only at the beginning. If individuals spend the same amount on time on social media as they do watching TV, then why are insurers not investing the same amount across the two channels? If we all know that social data can help small business owners find the right coverage, why aren’t all insurers adopting social distribution as a new sales channel? And if the data generated from social media can be used in conjunction with underwriting data, why are all insurers not using this ground breaking technology to improve their loss ratios?
The straightforward answer is: using social media for insurance is hard. The raw data is unstructured and requires specialised data scientists to create predictive models. Converting the data into actionable insights is virtually impossible without a customised enterprise platform, and distributing insurance on social media is a difficult task for every organisation we’ve worked with. Because it is a complex and difficult problem, specialised startups are needed to take on the technology and market risk, as incumbents will not be able to quickly develop the necessary technology for such a niche field themselves.
So what lies on the horizon for using social media in the insurance industry? We see one of the biggest opportunities in the area of small business insurance, both in terms of distribution and underwriting. Also, insurers who are not already distributing insurance over social media are going to fall behind their peers, since lower customer acquisition costs and greater reach is possible on the right social media platforms. All put together, we see 2018 as a year of continued strong growth for social media in insurance. So get prepared to ‘like’ your insurer even more!