It’s set to be worth as much as $10 billion (£7.7 billion) by 2020, but the influencer market is relatively untapped by insurance at the moment – presenting potentially huge growth opportunities in the future.
In a world where we all have a smartphone in our pocket, social media is king. But many influencers and public figures, who can be paid thousands – sometimes millions – for a single post, are largely unaware of their exposures.
“Traditionally, content was created by TV broadcasters and their production companies, as well as radio broadcasters, newspaper publishers, and publishers of books and magazines. Nowadays, the growth and adoption of new technologies and the rise of social media has created a new content creator, in the form of influencers and high-profile public figures, be it sports stars, TV hosts, etc,” James Brady, head of media at Hiscox UK & Ireland, told Insurance Business.
“Nowadays, sometimes without really knowing it, they are creating and disseminating content, and therefore have risk attached to that,” Brady went on to say.
A poorly judged Instagram post or impulsive Tweet can have huge ramifications for those in the public eye – just ask Tesla CEO Elon Musk, whose recent Tweets cost him $40 million in fines and his role as chairman of the firm he founded.
For social media influencers or public figures contracted to do promotional work for a firm, they can quickly find themselves in hot water should something go awry.
“If you bring a brand into disrepute by something that you do or say, in the form of a Tweet or an off-the-cuff remark at a public event, then you could fall foul of the terms of that contract in terms of the quality of endorsement or promotion that you’ve been hired to do,” Brady said. “The brand could bring a claim against you for damage to its reputation, potentially, under breach of contract.”
And while many consider defamation claims the domain of journalists, it is a real exposure for those using social media to air their views – and can come with a hefty defence bill.
“A lot of people think that defamation isn’t too much of a risk for them, because they don’t feel they will ever defame someone. However, that’s all well and good until after the event… Especially in the UK, it’s a jurisdiction where the defence of a defamation claim can be an extremely costly one,” Brady explained.
Hiscox launched an influencer and public figure protection insurance policy last month, covering the risks faced by influencers and high profile individuals as they lead their lives in the public eye. It’s a sector that the insurer sees as a potential key growth area going forward.
“It’s a new, growing, exciting, innovative area,” Brady said, adding that he expects other insurers will enter the space eventually. Currently, Hiscox claims its policy is the first of its kind in the UK.
“Given that adoption of technology and social media usage, we are now – fortunately or unfortunately, depending on how you want to look at it – a population that is crazed with being on our smartphones, tablets, etc. With that, brands are looking at new and innovative ways to connect with the buying public,” Brady said.
But there is a task ahead for insurers and brokers who will need to educate the client base, many of whom may be younger, less business-savvy individuals, on where the risks lie.
“A lot of these people don’t really appreciate the exposures that they have, or that are attached to the activities that they are carrying out,” Brady said. “They may not even consider that they need to buy an insurance policy. I think it will be as much of an education of those individuals as to the product being available and the risks and exposure that face them.”