The old adage says there are six degrees of separation. Everyone is at most six steps away from any other person on Earth, so that a chain of, "a friend of a friend" statements can be made to connect any two people in six steps or fewer. With the rise of social media sites like Facebook, it appears that everyone is now connected to a friend. My 18-year-old nephew has over 1200 friends!
So what? Well, increasingly customer purchase behavior and loyalty are influenced by friends and acquaintances. Understanding these social relationships and their influence between customers enables marketers to improve the effectiveness of campaigns and product offers. One such solution helping insurers in this area is SAS Customer Link Analysis.
Many insurers have already created a social media presence, but often this is simply to promote and advertise their brand. However, Generali in France have developed a concept called Kontsurnous. Launched in June 2008 this is a group insurance plan where tribes of up 15 buddies (family, friends or colleagues) join together. For each policy sold in the group, the tribe will earn points. These points can then be redeemed for lower premiums or deductible reductions in the event of a loss. This concept has allowed Generali to increase its customer base while reducing its acquisition costs.
Another department using link analysis is claims. Although technically not a new concept to the claims area, Special Investigation Units (SIU) have been using link analysis for a number of years to create networks of entities to investigate potentially fraudulent activities. However, the building of these linked networks has in the past often been a manual and time-consuming process. Today insurance companies are implementing software to automate this process. Using this technique, insurers have achieved higher fraud detection rates, reduced false positives rates and improved investigator efficiency.
Do not just take my word for the use of social media in insurance. Michael Costonis, executive director of Accenture’s Insurance practice recently wrote a three-part series on social media and insurance.
On a lighter note? – The recent Ryder Cup got me thinking how the length of golf courses have increased in recent years to combat advances in golf equipment. However this golf course in South Africa seems to have taken things a bit too far!
