As Thomas H. Davenport and Jeanne G. Harris put it in their book “Competing on Analytics”, Analytics is the new science of winning. Harping on the virtues of Analytics would be a wasteful exercise. People are sold on the idea.
Heavy duty analytics was deployed to locate the MH370. Big data analytics was at play to effectively devise disaster management plan when hurricane Sandy hit America. Application of Analytics to retain and reward customers, design products and market them is widely in use. Banks and financial services firms use fraud analytics, social media analysis and text analytics effectively to reduce costs and improve efficiency.
The advent of Facebook, Twitter and LinkedIn has revolutionized the the behavior of people in many spheres of lives Barrack Obama won the Presidential elections for the second term in 2012 and social media campaigning was an integral part of his overall campaign strategy. He is even called the “first social media president”! Indian political parties have been deploying social media effectively to campaign for the ongoing elections.
The impact of social media has been more significant in the field of marketing. Before buying a mobile phone, most people do research and read reviews on the internet. Similar behavior extends to other kinds of purchases including a house, car, electronics goods, books and even financial products like stocks and insurance.
Due to changes in behavior of a customer, companies have changed their marketing strategies with increase focus on social media. There is a focus to increase presence on the web, engage directly with end customers through social media and manage any adverse feedback quickly and effectively. Social media can be used as a powerful tool to marketing, customer servicing and maintaining public relations.
The significance of social media prompted us to carry out a study on the visibility of ‘Life Insurance’ on social media.
Life Insurance forms 16% of the total financial savings of Indian households. Only 3% of the savings are invested in the capital markets.
Compositing of Savings in Financial Assets of Indian Households
Source: Reserve Bank of India, 2012-13
The Life Insurance industry has seen a gradual decline in various key parameters over the last three years.
Key parameters in relation to the Life Insurance Industry in India
Source : IRDA Annual Report 2011-12, 2012-13; Swiss Re, Sigma No. 3/2013
While there are numerous reasons which have contributed the decline, how does life insurance perform in terms of their presence on social media?
For the purpose of this study, social media monitoring tool Opinion Tracker was used. We tracked Web News, Social Networks (excluding Twitter) and Blogs. We compare the presence of life insurance on social media, with the stock market, for a 3-month period (29/12/2013 to 29/03/2014). Is the flow of savings into Life Insurance and stock markets proportional to their presence on the social media?
The key words used for the study were Insurance, Life Insurance, IRDA, Indemnity, Life coverage, Tax savings 80c Life Insurance, and names of various Life Insurance companies in India, to get the count for the ‘Life Insurance’ presence. Words like Nifty, Sensex, Equity, Stock, BSE, NSE and SEBI were used for finding the presence of ‘Stock Market’ on social media.
While the results can be influenced by the period of study, the use of different key words from what we have used, and other industry related reasons, the results that we got were quite astonishing, even accounting for all the different scenarios which could result in different numbers from what we have.
The results shows despite so much of social media buzz for Stock Market, people prefer to invest their savings in Life Insurance. It clearly shows the tendency of Indian people to save and their risk-averse attitude. But, we would like to implore the readers to think for a moment, the kind of funds that can flow into Life Insurance market, if they upped their presence on social media!
Life insurance companies do not make much use of social media. The Life Insurance companies still rely on their agency force to spread awareness about the products. This claim is also supported by a recent survey published by Max Life Insurance-Nielsen, where 58% respondents said that Insurance awareness is generated by agents, while only 8% respondents believed that the awareness is generated by internet. They need to realize that Social Media has rapidly turned into a vital part of the modern marketing mix as well as the lives of at least the urban customers (existing or potential). A few benefits of using social media would be:
Incomparable reach. Would help the companies explore untouched markets and reach potential customers directly without middlemen.
Interact with numerous people, making them their potential customer and eventually resulting in sales.
Opportunity to showcase brand and products.
Develop a loyal community of prospects.
Enhance company trustworthiness.
Cut marketing costs.
Directly interact with customers to know their grievances and preferences
A dedicated team to spread awareness about the need for life insurance, the right cover, the products, and to engage consistently with customers would help the Life Insurance Companies to achieve growth in their business.