Filed Under:Risk, Enterprise Risk Management

Social Media Insurgents Threaten Insurance Brand

Defending an insurance company’s brand reputation in this social media era requires more than just routine public relations and mass media advertising. It takes a proactive counterinsurgency strategy.

That’s the main lesson insurers can draw from a new book, “Brand Resilience: Managing Risk and Recovery In A High-Speed World,” by a colleague of mine, Jonathan R. Copulsky, chair of Deloitte Consulting’s Marketing Council. Copulsky quotes liberally throughout his book from the “Counterinsurgency Field Manual,” a game plan devised by the U.S. Army and Marine Corps that’s generally credited with turning the tide in the latest Iraq War.

In his book, Copulsky notes that while the manual—available free online—is “written expressly for a military reader…its guidance has striking parallels with what is appropriate for brand stewards, given the new marketing realities.”

What are those new realities? It’s the fact that anyone can be a high-impact critic or investigative “journalist” these days given the viral nature of social media. Individual “insurgents” badmouthing a carrier can sway hundreds, thousands, and even millions of consumers—positively or negatively—with a laptop, tablet, or smartphone thanks to the growing reach of the web.

While risk managers in any industry could benefit from taking a counterinsurgency approach, property and casualty insurers in particular would be wise to pay attention, since they struggled to project and maintain a positive image and deal with brand threats even before the rise of social media.

This topic has been close to my heart for quite awhile. You may recall my cover story in the May 25, 2009 edition of National Underwriter, headlined “Insurers Can Polish Their Image While Boosting The Bottom Line,” which summarized a speech I had been delivering to various industry groups.

My main observation was that too many in this business are fatalistic about altering public perceptions, convinced that no matter what carriers do, the majority of people won’t understand how insurance works or appreciate the invaluable role the industry plays in the economy and society.

Related: Read More Sam Friedman Blog Posts

Tactically, I suggested, the industry also frequently comes up short. When a brand attack occurs, p&c insurers usually line up behind one common spokesperson rather than rally all their available troops to the industry’s defense. They sometimes mimic the “Rope-A-Dope” strategy employed by Muhammad Ali in his 1974 heavyweight championship fight against George Foreman by covering up and taking a beating, with the big difference being that Ali was trying to exhaust Foreman so he could launch a devastating counterattack. Insurers, I observed, seldom get off the ropes and fight back.

Property and casualty insurers pay the overwhelming majority of claims without incident, yet we usually only hear about the relatively few instances when they deny coverage (even if policy language supports their decision). Instead, we should be seeing reports in the news as well as social media posts featuring adjusters at a disaster site, handing out cash and assisting people in rebuilding their lives.

The industry also could better highlight how workers’ compensation insurers create safer factories and offices and get people back on the job faster. Or how the Insurance Institute for Highway Safety makes vehicles and roads less risky. Or how the Insurance Institute for Business and Home Safety conducts first-hand research to produce more disaster-resistant residential and commercial structures. (Why isn’t there a reality TV show depicting these life-saving industry efforts in action?)

Beyond doing a better job promoting everything the industry does to make people whole again and create a better world, insurers could learn some valuable lessons from Copulsky’s comparison of reputational risk management with a counterinsurgency when their reputation comes under attack.  In his book, Copulsky outlines a seven-step process to bolster brand resilience:

● Assess brand risks and be aware of emerging threats and their sources.

● Galvanize brand troops, including executives and front-line employees.

● Deploy early warning systems so you’re not caught off guard.

● Respond to assaults in a timely fashion, and consider ignoring some minor attacks so you don’t inadvertently turn them into major events.

● Learn from assaults and adapt your brand defenses accordingly.

● Measure and track your performance in managing brand risks. (Remember, what gets measured, gets done.)

● Generate popular support, in part by raising a “volunteer army” of brand defenders. (How often do we hear from those whose homes and businesses are rebuilt thanks to insurance?)

In any case, if insurers hope to at least earn the benefit of the doubt from the general public when a brand-threatening incident occurs, they shouldn’t sit back and let their often uninformed critics define them in social media. Adopting a counterinsurgency strategy would be a step in the right direction.

Insurers should be more proactive in shaping and defending their brand, as well as more strategic in how they approach reputational risk management. This industry does so many things well, and does so many good things overall, that it’s a shame insurers are usually only noticed when something (apparently) goes awry. It doesn’t have to be that way.

What do you folks think?

Sam J. Friedman joined Deloitte Research as Insurance Leader last October after 29 years at National Underwriter, where he was group editor in chief of the P&C Media Division. He may be reached at samfriedman@deloitte.com.

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