The insurance industry is “uniquely ill-suited” to the world of social media, according to one insurance executive – but must embrace this new world to avoid “real havoc.”
Richard Endhoven, managing director of Hollard Insurance Group, said that the fundamental dynamics of the industry are almost “uniquely ill-suited to social media” at a recent discussion about the challenges and opportunities of social media.
“When customers have a bad experience, it’s very bad and hugely emotive. When they have a good experience, it’s expected and normal,” said Endhoven. “That means every time they have a bad experience they’ll use social media, and only one of a hundred good experiences will make social media.”
He insisted that insurance shouldn’t just sit back and admit defeat, however.
“The industry has a major issue with social media,” he said. “There’s no way around it – we are going to have to find some way to deal with this collectively. We have to embrace it.”
Endhoven’s comments were made at the Australian and New Zealand Institute of Insurance and Finance breakfast held recently. Mark Senkevics, managing director of Swiss Re, was also wary of the impact of social media, suggesting it was very risky. (continued.)
“Clients have the opportunity to share their views on your performance very quickly, so your brand is enormously vulnerable,” said Senkevics. “It’s enormously risky, and you just have to look at the situations over the last few years where companies have fluffed it again and again.”
However, Mark Searles, CEO and managing director of Austbrokers, argued that social media could be a useful tool to gauge market and customer sentiment, if properly monitored.
“Social media allows customers to express views and socialize them very quickly. You need to be plugged into what’s being said about you, and hearing what the customer is saying,” he said. “Unless you understand how people view you, you’re not going to be able to act accordingly.”
Gary Seymour, managing director of PSC Insurance Group, also defended the use of social media, suggesting that insurers, underwriters and brokers could do more to engender positive interaction.
“The new generation are just as happy to say something good as something bad,” said Seymour. “But because we don’t open ourselves up to the positive feedback, we only hear the bad stuff.”
The discussion came as part of a wide-ranging panel discussion on the small and medium enterprises market, which also featured Willis Australasia’s Tony Barber and Lloyds of London’s Adrian Humphreys.