Social Media


More and more companies are using social media and many recognize the potential risks, but few have an adequate plan in place to manage those risks.

Two separate surveys point to the fact that as social media becomes even more widely used in the corporate setting, businesses need to properly assess and monitor the risks involved.

Chubb’s just-published 2013 Private Company Survey found that 68 percent of companies are using social media – up from 39 percent in 2010 – but only 12 percent are concerned that they will be sued for allegedly making defamatory posts.

Further, only 49 percent have a written social media usage policy for their employees, Chubb found.

Executives at 450 U.S. for-profit private companies were interviewed for the Chubb survey.

An earlier report from Grant Thornton LLP and the Financial Executives Research Foundation (FERF), found that some 71 percent of public and private company executives are concerned about the potential risks involved in the use of social media, but they believe the risks can be mitigated or avoided.

More than half (59 percent) of executives surveyed said their companies do not perform a social media risk assessment.

Also, two-thirds (66 percent) of respondents see their company’s use of social media increasing during the next 12 months, but only a third of respondents (36 percent) reported that their company has social media training.

As the report says:

The evaluation and monitoring of risk needs to be a key component of any organization’s social media strategy, and its importance cannot be overstated.”

More than 100 senior-level executives from public and private companies participated in the 2013 Social Media Risks and Rewards survey, which was conducted during May and June of this year.

Check out the I.I.I. paper Social Media, Liability and Insurance.

The Center for Marketing Research at the University of Massachusetts Dartmouth has released its annual report on social media usage by Fortune 500 companies.

It shows a surge forward in the adoption and use of social media and new communications tools among this year’s Fortune 500.

Of note for the insurance industry in 2012:

Some 81 percent of companies in the property and casualty insurance industry (stock) had Twitter accounts, while 69 percent had corporate Facebook pages. As for blogging, just 19 percent of these companies had corporate blogs.

Several P/C insurers have also adopted specialty blogs—those focusing on the company career paths and hiring information, social responsibility and community causes—including State Farm Insurance Cos and Liberty Mutual Insurance Group.

Back to the broader picture:

Overall, the study notes that some 73 percent of the 2012 F500 had corporate Twitter accounts, 66 percent had a corporate Facebook page and 28 percent had corporate blogs.

Furthermore, in the past year, F500 companies have increased their adoption of blogging by 5 percent, their use of Twitter for corporate communications by 11 percent and their use of Facebook pages by 8 percent.

For the first time this year’s study recorded corporate and specialty YouTube accounts. It found some 62 percent of the 2012 F500 (309 companies) had corporate YouTube accounts and 2 percent (11 companies) are posting on Pinterest.

The study notes:

It is obvious that there has been a surge forward in the adoption and use of social media and new communications tools among this year’s Fortune 500. For years, this group has lagged behind other sectors and at times appeared to shun social media. These latest numbers show a renewed interest that includes using these tools for engagement, hiring and fundraising as well as for corporate advancement.”

This landed in my inbox a few days ago. If in the course of the past year you’ve built an insurance website, created a mobile app or made an online film or video, you may want to submit your work for consideration for a Webby Award.

The International Academy of Digital Arts and Sciences just opened its call for entries for the 17thAnnual Webby Awards.

Hailed as the “Internet’s highest honor” by The New York Times, The Webby Awards celebrate the year’s best websites, interactive advertising and media, online film and video, mobile and apps, and social experiences.

If your company is interested in submitting for a Webby Award, the category to choose is: Financial Services + Insurance (Interactive Advertising). This is for the sites promoting financial services, information, or insurance on behalf of a brand.

The early entry deadline to submit works for consideration is October 26, 2012, and the nominees will be announced April 2013.

Judges include Tumblr founder and CEO David Karp, Instagram Co-Founder Kevin Systrom, and media mogul Arianna Huffington among others.

Entrants compete not only to win a Webby, but to deliver their 5-Word Speech. Since 2007, Webby Awards 5-Word Speech videos have garnered over seven million views on YouTube.com/webby

Worth checking out.

Be careful what you say online.

A British court earlier this week awarded libel damages of £90,000 ($140,000) to former New Zealand cricketer Chris Cairns as a result of a tweet posted about him in 2010.

The 24-word tweet, by former Indian Premier League head Lalit Modi, alleged that Cairns had been involved in match-fixing.

According to an Associated Press report, the ruling from London’s High Court determined that Modi “singularly failed” to provide any reliable evidence that Cairns was involved in match-fixing.

Modi was also ordered to pay £400,000 ($635,000) in costs to Cairns’ solicitors within 28 days.

This isn’t the first time a tweet has turned litigious.

In May 2011, singer Courtney Love was sued for alleged defamation on Twitter by former lawyers who had represented her in 2008 in an effort to recover money allegedly stolen from the estate of her late husband, Kurt Cobain.

And in March 2011, Love agreed to pay $430,000 plus interest, to settle a landmark Twitter defamation lawsuit brought in March 2009 by her former designer over comments Love made on her Twitter and MySpace accounts.

A recent I.I.I. paper co-authored by myself and I.I.I. president Dr. Robert Hartwig, notes that the growing use of social media in everyday life is giving rise to a range of evolving liabilities.

The good news is that insurance is available to help both individuals and companies better manage and reduce their potential financial losses from social media and cyber risks in future.

Check out a post on ZDNet blog Social Business for more on recent Twitter defamation cases.

Some of our readers may know that March is Women’s History Month. In celebration of the event, the Insurance Information Institute (I.I.I.) has developed facts and statistics that provide information on the number of women employed in the industry today and the percentage of women workers in selected insurance occupations.  In addition, the I.I.I. has posted pictures and historical facts on its Women in Insurance Pinterest board. 

Today, Insurance Information Institute (I.I.I.) vice president of communications Loretta Worters tells us more about women’s history in insurance:

Did you know that married women in the 1840s could not buy life insurance policies on themselves, a stumbling block to growth of the life industry?  Or that the Insurance Standard was the only insurance paper actively managed by a woman, Emily Ransom in 1897? Did you know that in 1910, out of 9,386 managers in insurance, only four were black women?

There is much we can be proud of as women in the insurance industry and what we’ve accomplished since those early days.  Today, for example, 49.4% of insurance sales agents are women, 57.4% are claims adjusters, appraisers, examiners and insurance investigators and 59.3% are underwriters.  In fact, women have comprised about two-thirds of the insurance industry workforce in each year from 2002 to 2011, according to the Current Employment Statistics Survey (CES). In 2011, there were 1.5 million women employed in the insurance sector, accounting for 66.1 percent of the 2.3 million workers in the insurance industry.

There have been a lot of firsts for women in the insurance industry.  The first woman insurance commissioner in West Virginia was Virginia Mae Brown.  In May 1961 she took office, making her also the first woman insurance commissioner in the United States.  The first recorded women’s insurance industry organization was the Women Leaders Round Table founded in 1936.  Today, we have similar organizations such as the Association of Professional Insurance Women started in 1976 which provides assistance to women with career development.

While the insurance industry is “doing the right thing,” still more can be done.  In 2010, less than 25,000 women were insurance actuaries, too few to calculate a percentage. In 2010, the ratio of women’s to men’s earnings was 81.2% for all insurance occupations; for insurance sales agents it was just 66.7%.

Bina West Miller, founder of one of the first organizations in the country to offer life insurance to women said something in 1892 that still applies today:  “Insurance is the coming work for intelligent, energetic women in the South, North, East and West.”

For more interesting facts in celebration of Women’s History Month, check out our tweets.

Approximately 1.4 million more adults were victimized by identity fraud in 2011, compared to 2010, as the number of fraud incidents increased by 13 percent in the United States.

One of the key factors potentially contributing to the increase in identity fraud was the significant rise in data breaches, according to Javelin Research & Strategy’s just-released 2012 Identity Fraud Report.

It found that 15 percent of Americans, or about 36 million people, were notified of a data breach in 2011. Those receiving a data breach notification were 9.5 times more likely to become a victim of identity fraud.

The report also found that consumers’ social media and mobile behaviors may be putting them at greater risk of identity fraud.

LinkedIn, Google+, Twitter and Facebook users had the highest incidence of fraud although there is no proof of direct causation.

Despite the warnings, people on social networks are still sharing too much personal information frequently used to authenticate a consumer’s identity.

Specifically, 68 percent of people with public social media profiles share their birthday information (with 45 percent sharing month, date and year); 63 percent shared their high school name; 18 percent shared their phone number; and 12 percent shared their pet’s name.

Smartphone users are also experiencing greater incidence of fraud, Javelin found, with seven percent victims of identity fraud. This is one-third higher incidence rate compared to the general public.

The good news is that despite the increase in identity fraud last year, it is becoming less profitable for fraudsters as the dollar amount stolen remained steady.

In addition, consumer out-of-pocket costs have decreased by 44 percent since 2004. Javelin attributed this to improved prevention and detection tools that have come available as well as fraud alerts leading to reduced detection time.

Check out I.I.I. info on identity theft.

Are you a fan of Facebook, YouTube, Twitter or LinkedIn? If you are one of the millions who interact on these social networks every day, do you ever consider the risks as you tweet, message, share and “like”?

A new white paper from the I.I.I. observes that like any other new technology, social media brings enormous opportunities and benefits.

Yet as businesses and individuals navigate this shifting online risk landscape, they face a range of evolving social media related liabilities including privacy, security, intellectual property and employment practices liability.

The proliferation of social media use comes amid growing concerns over cyber security. Businesses that store confidential customer and client information online are exposed to increasing liabilities and costs as a result of cyber attacks and data breaches.

A massive data breach at Sony Corp’s online game networks in April 2011 resulted in the theft of more than 100 million online accounts, for example. Just months later in October 2011 Sony’s Playstation Network and other online entertainment services were hit in a second attack that compromised 93,000 user accounts.

Coming in the wake of the 2010 Wikileaks breaches of classified data, these high profile data breach incidents have served to increase both public and government scrutiny of cyber security practices.

The Securities and Exchange Commission (SEC) recently issued guidance urging publicly traded companies to disclose significant instances of cyber risks and events. Description of relevant insurance coverage was included in the SEC’s list of appropriate disclosures.

While traditional insurance policies typically have not handled these emerging risks, in recent years limited coverage under traditional policies has become available.

But as reliance on traditional policies is not enough, specialist social media and cyber insurance policies have been developed by insurers to help businesses and individuals protect themselves from an ever-evolving range of risks.

To learn more about this emerging risk area, check out the I.I.I. white paper “Social Media, Liability and Insurance.”

Insurance companies in the Fortune 500 only slightly increased their use of Twitter in 2011, according to an annual study from the Center for Marketing Research at the University of Massachusetts Dartmouth.

The number of insurance companies in the F500 with active Twitter accounts moved to 21 in 2011 from 20 in 2010, the study found.

Insurance companies continue to rank first among industry sectors with a Facebook account, though the number with corporate Facebook pages dropped to 27 in 2011 from 28 in 2010.

Meanwhile, the number of insurers in the F500 blogging rose to 4 in 2011, up from 3 in 2010.

Overall, the study revealed that 23 percent (114) of the 2011 F500 have corporate public-facing blogs, the same level as in 2010, while 62 percent use Twitter, compared to 60 percent in 2010, and some 58 percent are now on Facebook, an increase of just 2 percent on 2010.

The study notes that the adoption of blogs, Twitter and Facebook in the 2011 F500 appears to have leveled off with no significant change in the past year:

These results may signal a leveling off and possibly retrenchment when it comes to the adoption of social media among the 2011 F500. There is also evidence of change in the adoption of these tools by industry and a clear sign from some companies that these are not part of their communications strategy.

Given that the F500 are the titans of American business, we may be seeing the slowdown in business adoption of social media. At the very least, this group appears to have slowed or stopped its adoption of the three most prominent tools – Blogging, Facebook and Twitter.”

Blogging about insurance, or on any subject come to that, takes time and commitment from both the writer and the reader.

So we’re honored to announce that Terms + Conditions has received a nomination to be considered one of the LexisNexis Insurance Law Community’s Top 50 Insurance Blogs for 2011.

Each year, LexisNexis honors a select group of blogs that set the online standard for a given industry. The Top Blogs campaign on the LexisNexis Insurance Law Community starts with a comment period that runs through September 30.

An initial list of nominees for this year’s Top 50 includes some of our favorites such as the excellent Tim Dodge’s Ask Tim, Guy Carpenter’s GCCapitalIdeas.com, InsureReinsure published by Edwards, Angell, Palmer & Dodge, the Lloyd’s blog, Risk Management Monitor published by RIMS, and The D&O Diary published by Kevin LaCroix.

To talk up or nominate your favorite insurance blog, just register and log in as a community member at this link.

About a year ago, we posted on the increasing use of social media in disasters.

A survey from the American Red Cross had shown that web users increasingly rely on social media to seek help in a disaster, and expect first responders to be listening.

Fast forward to today and according to L.A. NOW, a blog at the Los Angeles Times, a summer marked by social media-fueled riots in England and flash-mob violence in a number of U.S. cities, including Philadelphia and Cleveland, has prompted a debate about a social media crackdown.

L.A. NOW reports that rioters in and around London used BlackBerry messages to plan attacks, leading British Prime Minister David Cameron to suggest shutting down access to social media for anyone suspected of using it for criminal activity.

And after a large flash mob disrupted a Fourth of July fireworks display with violence here in the U.S., the Cleveland City Council passed an ordinance that would have made it illegal to use social media to organize a violent and disorderly flash mob. The mayor eventually vetoed the measure, citing First Amendment concerns.

Also, just last week officials at the Bay Area Rapid Transit District (BART) shut down its cell phone service to disrupt a protest over the shooting of a homeless man.

This raises an important question of whether officials legally can crack down on social media.

According to L.A. NOW:

Legal experts say police face a delicate balance when cracking down on social media — and prosecutors would have to meet a high bar to show that irresponsible, even reckless tweeting amounts to a crime.”

Across the Pond, an article in the London Guardian newspaper makes the point that police thwarted planned attacks on the Olympics site and stores in Oxford Circus, after gleaning intelligence from encrypted social messaging sites such as BlackBerry Messenger and also Twitter.

The Guardian also says police had considered switching off certain social messaging sites, but discovered they did not have the legal powers to do so.

In the words of acting Metropolitan police commissioner, Tim Godwin, cited by The Guardian:

We did consider seeking the legal authority to switch it off. The legality is questionable, very questionable.”

What do you think?

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