Insurers must embrace the social media revolution, both to protect their own corporate image and fully understand the underwriting opportunities and risks it presents. Industry experts taking part in a roundtable discussion event, hosted by the International Underwriting Association, also warned companies to have clear policies for the use of social media by their staff.
“A social media policy is essential. Every corporate organisation should have one, ” said David Gourlay, a legal partner at McClure Naismith LLP.
“If you allow people to use telephones, email and hold meetings independently, then they should, in theory, be allowed to use these mediums, ” added Mairi Mallon, Managing Director of insurance public relations company rein4ce “What it does is amplify your voice into a huge forum. But the issues were the same when email first came in.”
The event was organised by the IUA’s Digital Risk Working Party to debate the corporate risks behind the growing use of social networks in business and was chaired by Barrie Lloyd, Chairman of the committee and Casualty Portfolio Manager for the German Speaking Countries at QBE.
The discussion noted that while some insurers were now using social media very effectively to promote their brand, many companies are still yet to get involved and risk being entirely unaware of negative comments being posted about them.
Alex Hearn, Founder of insurance networking website MySlipCase.co.uk, said: “This is such a significant movement. It is a huge form of communication that is being used more and more every day. I think this means there is a need for all organisations to be involved in it and have a presence.”
Mr Gourlay commented: “Social media is a very powerful tool and it can do a tremendous amount of good. It comes down to managing your social media presence. Some organisations may be unaware of what is being done to their own brand.
“If you are not using it, then your competitors are. That is not to say you should rush into it. You have to formulate a proper plan, having regard to the risks and the wonderful opportunities.”
Despite the business risks of uncontrolled social media use the panel were also enthusiastic about the potential benefits to be gained.
“We use LinkedIn as a very strong marketing tool, ” said Ms Mallon. “There is no other way we can reach that many people – 80% of the traffic that comes to our website comes from LinkedIn. “It is an amazing way to promote the business and establish thought leadership.”
Underwriting opportunities were also discussed and the insurance industry was again urged to engage fully with the medium.
“Twitter has a language of its own that you have to learn, ” added Ms Mallon. “If you are going to create a policy around it or underwrite it, then there are all these terms you have to know: what a hashtag is, what retweet is. “It is falling to people to underwrite it who do not use it and that is a problem.”
The IUA’s Digital Risk Working Party exists to demystify the issue of digital risk and hosts various events throughout the year. It aims to encourage a transfer of information between IT managers and underwriters and alert insurers to their own potential exposure to digital risks.