Archives for April 2010

Do you accidentally have a new social media presence? Do you want one?

The world of social networks and social media move swiftly and this last two weeks have been no exception with Twitter’s conference announcing promoted tweets and Facebook’s F8 conference announcing all manner of changes to their web site. Here are a few things to watch out for that may already be affecting you. First one from a different social network – LinkedIn quietly announced through their blog that you can now ‘follow’ companies. This allows LinkedIn to send details about changes at the company to all of the companies followers. Since so many people regularly update their professional profile on LinkedIn details about who’s moved where is readily available, but also updates to the company profile can be automatically shared. The main use case will likely be prospective employees tracking target companies but there is a marketing channel here – one that targets the slightly older, better paid demographic who use LinkedIn. Do you suddenly have a following you’re not aware of and aren’t leveraging? The next two come from – there were a lot of announcements that we’ll dig into in future posts but for now there are two that may be directly impacting your brand. Facebook pages have been around for some time as a way for a company to have a presence on Facebook. What is less well known is that recent changes to Facebook mean that your company may have a page dedicated to it already! If any of your employees have told Facebook that they work for your company then Facebook will now have a page for your organisation. The page may or may not have some content on it already – likely sourced from Wikipedia. When visiting the page facebookers are shown what people in their network are saying about that company, and then what global or public updates have been made to Facebook regarding the company – a sort of tailored search if you will. Do you have a Facebook presence you weren’t aware of? Finally, at the F8 conference Facebook announced that it was spreading it’s wings and putting more Facebook functionality on other web sites. Facebook makes use of a concept called ‘like’. If you see some content on Facebook you can press the ‘like’ button, indicating your preference and informing your network of friends that you ‘like’ said item. Now, this ‘like’ button will be available on other websites outside of Facebook and is already growing in popularity – you’ll notice sports stars web pages and news articles are now sporting ‘like’ buttons. This means that you don’t need a page on Facebook to make use of Facebook’s sharing and viral functions – you just need a ‘like’ button. There is much discussion at present on what would happen if Facebook suffered an outage, how much power this will give Facebook and how much data they are collecting but not sharing back. Each company will need to take it’s own view on the ‘like’ button – do you have some content or products online that you would like customers to ‘like’? If you’re new to social newtworks or want to know more, have a look at our report – Leveraging Social Networks: An In-Depth View for Insurers.

Thor vs. Zeus or why there is no rush for Germany to bail out Greece

A lesson learned from the financial crisis is that the life insurance and wealth management industries are heavily dependant on the general state of the economy. Therefore it is important for insurers to understand what exogenous and endogenous factors can impact their business: The current challenge faced by the EURO zone and the EURO currency following the Greek unsustainable financial situation is an interesting example of a single event influencing insurers. At the very beginning of the Greek crisis, nobody would have expected it to last so long. According to financial experts, the EURO zone countries had not interest in letting the situation worsen. But interestingly, Greece is still in danger and so far, nothing concrete has been decided by any of the parties potentially involved in a rescue plan and notably Germany. According to me, there is a good reason for that. Germany has always been complaining about the strength of the EURO currency. Indeed, a strong European currency penalizes German exports and therefore the whole German economy. It is important to recall that Germany counts more than any other European countries on exports to grow its economy. In consequence, Germany has an interest in letting the Greek situation worsen and letting the European currency get weaker and weaker. Of course this is a dangerous game but Germany seems to have all the necessary cards in hand and by the end of the game, there will certainly be a plan to save Greece from bankruptcy. It is a war of a new age, whose main characters are barbarian and mythological gods: Thor vs. Zeus! But it is more importantly a political battle, whose objective is to determine what is the long-term vision of the European construction. In the meantime, insurers will have to analyze how the Greek case may impact their business and notably their asset allocation strategy and adapt…

Can Google Save Us From Bad Interfaces?

As often happens, a recent conversation with an insurance CIO produced an “ah ha!” moment for me. Why is it that we, as an industry, are so slow to recognize technology user behaviors that have become commonplace? If everybody Googles, why don’t insurance applications?

The topic of discussion was the difficulties that technology execs face in supporting the polarized needs of users. For example, some agents still prefer to take new applications via their trusty yellow legal pads and ballpoint pens, while others take a laptop-centric view of the world and prefer electronic applications. Those two streams may converge at some point (probably on the desk of a field office or underwriting assistant), but there are critical implications for processes and technology.

Even within the subset of agents that is technologically savvy, there are differences. For example, most agents are comfortable generating an illustration using traditional desktop software, which presents a series of data entry fields and spits out compliant presentation materials in about 10 minutes. But what about the agent who is a Google power user, who thinks in terms of a command-line interface to do things more quickly and more directly? Could a Google-based comparative illustration application work?

On a goof, I tried entering the following in Google: “male 44 year old non-smoker 20 year YRT.” What the heck, I thought, go with the I’m Feeling Lucky button. (For the uninitiated, this slightly irreverent option in Google takes you directly to the top search hit based on the other terms entered, rather than presenting you with a list of all hits.)

I’m Feeling Lucky produced no result. Shocking! Apparently, there are no carriers leveraging a pure online illustration package with a Google interface. A regular Google search wasn’t much better—it turned up lots of articles on mortality and insurance, but not what my hypothetical agent was looking for.

The lesson for me is that if the insurance industry truly designed technology to meet user needs and expectations, this application or something similar would exist. The technology is proven, and commercially available.

Is insurance more complex than searching for a JPG of a common house wren? No question. Are there difficult issues with designing a business model around this approach? Absolutely! But technology exists to solve problems, and sometimes to enable radical shifts in how businesses and customers interact. We could avoid a lot of pain and effort by leveraging existing user behaviors, rather than forcing users down the paths that are most convenient for us.

The art of The "Big Picture"

Getting a good Big Picture up front is one of the keys to the success of any project involving new or significant change to Information Systems. The Big Picture comes in two parts: The picture itself and the story that goes with it. First there is the picture, the document that we would call The Big Picture. This document need not be a rigorous diagram, although for those familiar with the Unified Modelling Language, the UML context diagram would be a good start. For those familiar with TOGAF, this would be the Architecture Vision document summarised into a single picture or diagram. The principal systems should be present and should be described in business terms. Where the system is customer facing the key channels to market should be represented and the key points of interaction between humans (staff, customers) and the systems should always be present. Each stakeholders interests should be represented – so, if a key stakeholder looks after a call centre – make sure the call centre is represented. If a key stakeholder is responsible for leads sourced via email – have this in the diagram. Communication between items on the diagram should be represented and some short narrative should be given where the purpose of a system or communication isn’t immediately obvious. If possible any phasing or early deliverables should be highlighted. This probably provides 60% of the value of the Big Picture. The other 40% is derived from the story line surrounding the document. The document is intended as a mnemonic and a tool to drive conversation. It is the conversation around the picture that fills in the gaps. So the Big Picture says “I have covered all the angles,” “Your specific concerns are addressed and you can see them here, here and here” (for each stakeholder) and finally, “here’s the names of everything involved and how they fit together.” The surrounding storyline needs to fill in the gaps. The storyline comes from enterprise architect and needs to describe how it will all work when we’re done, how the solution will address all the stakeholder concerns, how the general case will be addressed in this model and finally how exceptions will be handled. This conversation comes from the discussion of the big picture with key stakeholders and weaves the storyline to their particular concerns. It is typically much harder to capture the conversation in a document. It is formed in the mind of the enterprise architect as they capture the requirements, examine the existing systems and draw on personal experience to build the big picture document. Frequently, they challenge themselves with exception cases to test their model but never get exactly the exception case queried during a presentation. As a result many of the story lines around exception cases are answered on the fly – with a good knowledge of the domain and a good Big Picture this should be relatively easy for the enterprise architect. So the Big Picture is a document which acts as a mnemonic and provides comfort to stakeholders that they are being cared for. The Big Picture is also the storyline that accompanies the document, that sells the concept and brings to life what it means for the stakeholders. Finally a good Big Picture acts as a flag for a project, a reference point to follow. Do you have a project that has no clear end game, no commonly held vision? Or for which your key stakeholders are worried that their particular concerns are not being addressed? Perhaps something as simple as an A0 diagram capturing the salient points of the project for each stakeholder would give all participants the boost in confidence and direction they need.

Underwriting Using Social Networking Tools

My colleagues, Catherine Stagg-Macey and Craig Beattie, released a research report today titled Leveraging Social Networks: An In-Depth View for Insurers. They predict that “insurers will increasingly use public shared data to inform pricing decisions and aid in fraud detection.” They cite several situations where data held on social networks has already been used in court cases in the US. So, how could social networking be used in underwriting and where might we see it emerge first?

Consider a low frequency, high severity line of business such as high limit Personal Umbrella. Improving selection on $5 million liability policies can have a significant impact on results.

How would these connections be established? Will the application process include a link to a person’s social networking page? Will insurers offer incentives such as rate decreases or coverage extensions to incentivize potential insureds to link their personal data to insurers? (I am sure that state insurance commissioners will want to weigh in on the legality/acceptability of this!)

Even if an insurer cannot gain access directly to someone’s page, the publically available information might provide useful underwriting information. For example, if someone checks the “no” box next to the “Do you skydive?” question on the application, but they are a “fan” of a skydiving equipment company, this will likely cause an underwriter to ask a follow up question. Or, alternatively, this may result in an automatic decline by a rules engine applying eligibility rules.

Finally, even if there is no direct information available via social networking pages, it will be straightforward to construct relationship networks for an applicant and at least identify if they are linked to anyone for whom an insurer has in depth information about. To continue with the skydiving example, if several skydivers are linked to a prospective insured, it should create underwriting concern. Additionally, expect to see information vendors provide products which scan social networks for data which can be used to inform the underwriting process. Expect to see social networking reports alongside CLUE and MVR data.

Up to now, a good deal of discussion around social networking has been about how to use these tools for marketing and branding. Thanks for Catherine and Craig for extending the discussion into these other important areas of the insurance process.

Meerkats and insurance brands

The Economist this week made an interesting point about brands. The public downfall of Tiger Woods is attributed to wiping of $12 billion in value of his then sponsors, Gatorade and Nike. From someone who is not offay with the world of marketing, this seems like a devastating consquence that was out of the hands of the brands. Since insurance isn’t a consumer brand, it’s hard to imagine such a negative impact of the brand association. When Swiftcover launched their Iggy Pop ad campaign, and the press released the fact that the insurer didn’t cover musicians, it was hardly a black day for the insurer. So whilst there isn’t much negative impact on the brand, there are some examples of a posititve impact. In the United Kingdom, there is a delightful campaign around Aleksandr Orlav, the meerkat—a fictional meerkat character used by BISL Limited in the advertising campaign. has an advertising campaign based around a mock similar website. Originally the name was selected to highlight the “market” element of the website, since “compare” is a common term now in UK aggregator websites. The meerkat character has appeared in television, print, and online media adverts. It’s a bit like marmite – it’s a love or hate relationship, but no-one I know has been put off using CompareTheMarket’s website. And what’s really interesting is the effect of brand association with the meerkat. As the figure below shows, the meerkat campaign has helped increase traffic to the “sponsor” website”. The meerkat also has the highest number of followers for UK insurers in social networks (Twitter and Facebook). This is one of the few examples of a succesful social network strategy, even if we measure the success only on page hits. What’s clear from our conversations is that insurers are puzzled about how to leverage this new technology, and worry about chasing rabbits (or meerkats) down dark holes. We’ve pondered this topic too and will publish a report next week – here’s to navigating rabbit holes and meerkats together.

6.17.10: Celent Insurance Webinar: Solvency II: How to Leverage Technology to Meet Regulatory Requirements

Celent senior analyst Nicolas Michellod This event is free to attend. Celent clients and the media will have access to the webinar’s PowerPoint presentation after the event. Please click here for more information.

5.20.10: Celent Insurance Webinar: Online Insurance in Europe: The Importance of Aggregators and Consequences for Insurers

Celent senior analyst Nicolas Michellod This event is free to attend. Celent clients and the media will have access to the webinar’s PowerPoint presentation after the event. Please click here for more information.

Facebook Cap tweets your thoughts

A new product – as yet unnamed but dubbed ‘The Facebook Cap’ – is every social networker’s dream. Fitted with 3G, GPS, and a digital camera, the cap keeps all of your friends up-to-date with your location and pictures of what you are doing uploaded to every 3 minutes. A 16 core computer and a web of sensors built into the cap utilize the latest advances in neuroscience to determine which parts of your brain are active. With some training it can tweet what you’re thinking about as you’re thinking it! Sounds like science fiction? Actually much of the technology already exists. But perhaps even more surprising is that this type of product would likely find a sizable market. A group of social networkers Celent categorizes as “over-sharers” will jump at the chance to share even more data about themselves. They will look to consumer electronics goods to enable this. Look out for Celent’s upcoming reports on social networking and digital marketing to find out more. Happy April Fools day.