How to grow your book of business

Most carriers in North America work with independent agents. Although the majority of premium for personal lines is written direct, that is largely concentrated in a few large carriers. Carriers who use independent agents know that high production from agents is correlated with strong relationships. However, beyond encouraging a strong personal relationship with an underwriter, what else can a carrier do to systematically build a stronger connection with an agent and grow their book? Celent surveyed a group of agents to understand those areas most likely to make a carrier the agents’ top choice. The report addressed the following key research questions:
  1. When it comes to placing business with carriers, what criteria are most important to an agent?
  2. How are top carriers performing on those criteria?
  3. Where should carriers prioritize their investments in order to drive growth?
Key Findings
  • It is easy to think that price is the most important factor when it comes to where an agency chooses to place business. Competitive products and price certainly are important; however, even more important than products and price is the responsiveness of the underwriter. A fast underwriting decision is also quite important with over 60% of agents stating this is a must-have.
  • Money matters to agents although the specific components are not essential to all agents. The most important component is commissions. Interestingly enough, 40% stated that the commission rate does not necessarily have to be competitive. Only 30% said incentive compensation programs were must-haves – and 40% said they were nice to have or didn’t matter at all
  • Beyond that, agents also look for support in other areas. A strong brand is important, as it is easier to sell a company where the prospect already has an emotional connection. Marketing, training, and consulting support is seen as important by more than half the agents and especially younger agents who may benefit more from these types of services than older established agents may.
  • Mobile tools and social media support are generally not seen as important items to most agents – but there is a significant generational difference here. 25% of younger agents see mobile as a must-have compared to 4% of those over 60. Generational differences will become more important to carriers as baby boomer agents increase their rate of retirement and are replaced by GenX and Millennial agents.
  • Agents want carriers to invest in those tools that are most important in helping them perform their job of writing business and providing customer service to the policyholder. Most important to agents is continuing to build out both the integration with the Agency Management System and expanding the functionality of the Portal. Least important to agents are features such as mobile apps, online certificates of insurance, online commission statements, and access to marketing materials.
Looking ahead, the industry is likely to continue to experience increasing channel complexity and increasing regulation, which means there are opportunities both to improve the agent experience and to reduce costs along the way.  Carriers who are looking to drive growth by improving the agent experience should start by looking at their technology offerings and make sure they are delivering the functionality that is most important to their agents. This report presents the results of an online survey conducted during May 2015 of independent insurance agents. It contains 13 figures and 1 table. You can find it here: Driving Growth by Optimizing the Agent Experience

Social Media at ACORD LOMA was Really a Social Discussion

For the first time at ACORD LOMA one of the sessions was a discussion, a workshop on a topic that required the audience to participate.  The session, “Social Media in Business: Friend, Foe, or Who Cares” was moderated by Mike Fitzgerald of Celent and in the end was well attended and well received. When I first walked into the room, I noticed the room set up was different than most sessions.   So did the others who followed.  Instead of rows of chairs and tables, the tables were a U.  There were only 30 chairs so the audience was limited to ensure the discussion flowed.  Most people came in, sat down and made him or herself comfortable, but it was evident that a few did not expect the layout.   A few people stepped into the room, looked for a seat, and opted to leave when they saw the layout and format of the session.  This was different than other sessions. And yes, it was different.  The session began with introductions of each attendee. Slides were limited.  Questions were asked of the moderator at first, but it quickly turned to the attendees asking the other attendees how things were being done where they worked.  It was exactly how a Social Media discussion should be! Mike presented a few slides on the different levels of social media involvement.  Most insurers are still at the infantile stages of social media, meaning that the insurer is in the marketing or media stage of social media.  They are promoting brand, using mascots, and getting their presence known in the space.  However, a few in insurers in the room had moved into the next two stages in Social Media use, meaning they were further along in their use Social Media.  Some insurers had developed networks both internally and externally using social media.  This is often done through agents or agencies with customers or even within the enterprise itself.   Others had gone as far as setting up methods for listening to Social Media chatter to understand and react to customer postings and feedback.  The level of use of social tools for both internal and external engagement was a surprise. Use of social for customer service was also covered.  Results from the Celent report Realizing the ROI of Social Media in Insurance: Listen to the Mirror were reviewed. This research scanned over 350,000 posts that consumers left about their insurance companies – what topics were posted, what sentiments were expressed, etc.  Real-life examples were offered by two of the participants in the room who exchanged their personal experiences using Twitter to engage with insurers about complaints.  In both each case, the negative Tweet was answered, however, it was noted that neither person posted a subsequent positive, follow up Tweet! Overall, the consensus of the group was that is medium is an effective and rapid way to get attention. The final topic dealt with using social data for core insurance processes such as claims and underwriting.  Multiple participants reported that their Claims areas were accessing social sites as part of their investigations process.  The group agreed that there is potential for use (and misuse) of social information in Underwriting, but that this area is still very much emerging. Based on this experience at LOMA/ACORD, I encourage you to look for the discussion group sessions at next year’s event.  It was a valuable source of information and enjoyable, too.

“Did I just Tweet my account number?”

As if financial institutions don’t already have enough to do to keep up with developments in social media! They must clearly outline company policy to employees concerning what should and should not be posted, inform agents of the regulatory do’s and don’ts, and continually scan the internet to respond to comments about their brand. Now, it is clear that they must also guide customers about the appropriate and inappropriate use of social networking when dealing with fiduciary transactions.

As usage grows, requests to employ social tools as the main communication tool between customers and their financial providers will also increase. For example, Bank of America now offers a Twitter feed to their customers as a first point of contact. Customers tweet their inquiries, complaints, solutions, etc. and these are transferred to the BOA customer resolution system at a call center. A customer service professional asked me about this recently, “How does the bank prevent customers from tweeting their account number?” My reply? “They can’t.” Last week, I was speaking with one of the largest disability insurers in the U.S. and found that their claimants are asking them to track their recovery on Facebook. To paraphrase the question received from a client: “I am keeping my family and friends updated on my progress by posting on Facebook. Can’t you just follow along?”

These are only two data points, but I suspect there are many more. Customers need their awareness raised about what information should be protected when communicating with a bank or insurer. These institutions have been dealing with privacy and confidentiality protection for decades, but usually in a context where the conversation is more controlled and private. With the broadening use of social networking for operational processes, companies must explain and remind their customers of the sensitivity of data.

I took a look at the Facebook walls of ten U.S. financial institutions and noted that there was no mention of do’s and don’ts or reminders to safeguard information on these front pages. There were plenty of contests I could enter, and a few postings on positive service experiences, but no tips on how to keep financial data safe. There were mentions of confidentiality and privacy on some Info and Guideline pages, but these are the domains of attorneys and dedicated research analysts – not likely where John/Jane Q. Customer is going be.

As social sites become more “operational” in nature, highlighting this issue in high profile places such as the main wall will be necessary, but not sufficient to protect customers from themselves. Look for leading companies to aggressively coach their customers and prospects on how best to use social tools when posting/tweeting/blogging on the same valuable real estate that they now reserve for marketing messages.

(Thanks to Jacob Jegher for an assist on this post.)

Debunking myths: What is that senior person doing on-line?

It is widely agreed that baby boomers and seniors are increasing their on-line presence. On multiple occasions, I have heard this observation made, followed by a statement to the effect that “they want to keep up with their families and post pictures of their grandchildren”. Data from Pew Research actually shows that these groups are participating in a much broader set of activities. As the chart below shows, boomers are at least as active as younger groups when it comes to non-trivial tasks such as getting financial information, and buying products. The 45 to 64 age group is even more active than others when it comes to rating a product, service or person.

The Pew Research data also shows that, in the past two years, participation in social networking sites has increased the most in the boomer groups (by over 30%). Companies seeking to increase their online channel and/or build advocates and fans using social media need to target older, as well as, younger age groups.

Social Networking, Meet Underwriting

Our esteemed social networking guru, Craig Beattie, circulated a blog posting that he found at

It describes an internet company, Social Intelligence that monitors social networks to help companies with hiring decisions. Their data mining tool collects information from the major sites looking for behavior-based information about job applicants and summarizes what is found in a report. It uses only publically shared data and includes a review by humans to eliminate any “false positives”. There is also a service for continual monitoring of existing employees. According to the blog posting, the company makes the point that with the emergence of social networks, shareholders will expect companies to use such services to evaluate new and existing hires and reduce the liability of the company from lawsuits, damage to reputation, etc.

Celent has not reviewed this company or its solution. However, in discussing what this approach might mean from an insurance perspective, several questions arose. Will such monitoring be considered a mainstream risk management technique one day? Would an insured using such a tool be rated a lower risk than one that does not? Should the shareholders of an insurance company reasonably expect the underwriting process to include the monitoring of social networking sites, especially for the general liability, disability and workers compensation lines of business? In the past, such data mining has been blocked by regulators based on privacy issues, but if all this information is willingly made public will those objections still be valid? Social networking, meet underwriting.

Social Media so hot, Ben & Jerry's email marketing melts

The story that Ben & Jerry’s are dropping email marketing in favour of social media hit something of a sweet spot with me. Not only do I not like trawling the ever increasing mass of emails each day but I also have a keen interest in how the Internet is evolving and a highly developed sweet tooth. The story is quite interesting as it tracks some of the trends Celent observed in our Digital Marketing in Insurance report. For many insurers email marketing and communication is the primary digital method of reaching consumers, however most insurers saw social networks and social media as becoming an increasingly important channel to market. Perhaps Ben & Jerry’s move is both a little early and a sign of things to come. This also comes at a time when rumours abound regarding yet another social network set to come from Google, possibly to be called Google Me. Indeed there are stories that disenfranchised companies working with Facebook may already be signed up to work with Google Me. A slide show published by a user experience researcher at Google offers some insights into the key issues with current social networks, how the new social network will look and the features it will offer businesses. For insurers looking at social networks as a medium to customers or looking at how they can expand their use of social networks Celent’s report on the subject may well be of interest. Addendum: Also making waves in social media is the old spice campaign on YouTube. Effective use of this style of campaign is discussed in our report but it is particularly well executed here.

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.

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.

Can Google Buzz teach insurers a few lessons about social networking?

Google tends to get a lot of press simply because it’s Google, although it’s fair to say Google has got a few things wrong with some of its products – anyone remember Orkut, or all the hype around Google Wave? One thing is certain Google have got a lot right about its launch of Google Buzz. This may be particularly interesting as some insurers and financial advice web sites move to create their own social networks. Let’s examine first what Google got right and then what we can learn from where they went wrong. Firstly, and I think this is key, Google leveraged an existing network. Google Buzz is built on Google Mail. This immediately gives a population of customers. In addition this product already has many of the customer’s frequently contacted friends. This means there’s little set up involved and the network has been swiftly established. Secondly Buzz leverages existing assets and relationships. It’s linked to Flickr, YouTube, Google Reader, Google Maps and others. This means that customers can continue using existing and familiar tools and gain extra value from Buzz. Thirdly Buzz came out with a programming interface to allow third parties to start integrating. It also leveraged existing networks and APIs allow it integrate with the customers other applications very quickly. Lastly, Google have been very quick to respond not just with words but meaningful change to the product, even though it is only a week old at the time of writing. In an interview, Google have described having a War Room set up with developers and product owners listening to customers in real time, and making key decisions about whether to and how to change the product. However, Google have got two things wrong. The very public and ill-thought through impact on privacy has been the key concern. Customers could easily and accidently disclose information about who they frequently emailed and contacted – information previously private. This is of concern to cheating partners and political activists alike. Google have already done much to address this concern and what was an own goal is now being applauded as a swift response by advocates. We’ve learned today that the privacy issue has sparked some class action lawsuits in the US. The second thing that could have gone better is the programming interface – which is currently read only. I would expect a further increase in adoption once tool authors can create updates to Buzz directly and for me constitutes a huge opportunity missed. What does this mean in financial services? Some simple guidelines:
  1. Leverage existing assets – both information you have and public information. Google have asked their customers to volunteer their twitter ID. This information provides Google with an already public list of their customer’s friends. Unless you have a key unique selling point, consider leveraging existing networks rather than building your own – for example Twitter or Facebook.
  2. Link your network to support the free public feeds from Flickr, Twitter, etc.
  3. There are successful social networks that operate without a programming interface. Very few companies have offered open programming interfaces with insurance or financial data – is one such example offering read only transaction data. In other domains allowing third party developers and tools vendors to build applications for a website has sped up adoption. Limiting an API to posting updates, managing communication and friends should have the same effect.
  4. On launch, set up a War Room. Most of the feedback will arrive in the applications infancy and its survival depends on identifying the issues and opportunities, prioritising these and visibly acting on them.
  5. Finally – get the security and privacy right. The two go hand in hand. Getting it a bit wrong and fixing it quickly as Google have can earn you forgiveness, but customers will likely expect more from financial services organisations.

Why social networking can be bad for your house premiums

As reported in the press today, Legal & General here is the UK is considering adding the usage of social network sites in deciding on premiums. On the back of their own commissioned research, the company believes that burglars are increasingly using sites such as Facebook to identify targets. I can understand the logic of this approach, but it seems a little heavy handed. The idea is to penalise homeowners who has anyone in the family using a social network site. Given the prevalence of these sites, a very high number of people will be caught in this net (given the insurer plans include any family member). I know of people who are very careful about what they put up on these sites, never declaring holidays until they are complete, and “friending” their children so as to be aware of what information the offspring might put into cyberspace. Are these people to be cast into the group of “higher” risk? Being aware of the evolution of criminal behaviour is important and educating your policy holders seems a more positive way to approach this problem.