How to Make a Difference

If Canada’s insurance industry aims to recruit members of the FaceBook generation, the industry needs to appeal to the generation’s desire to find meaning in their work, a technology analyst for CBC told a convention of the Insurance Brokers Association of British Columbia (IBABC).

“That’s why Apple is so powerful: they don’t sell their products, they sell the spirit of their products” to the FaceBook generation, Tod Maffin told his audience. “In your company, you may indeed be doing things that are helping the community. You may be doing things that are meaningful in personal and very worthwhile ways. The problem is, you need to articulate that, and do it in a way that doesn’t say, ‘We’re doing really nice things for the community…’

“You have to be able to articulate meaning much more than you’ve ever had to before. Your recruitment efforts must demonstrate in real terms the difference that you are making in your customers’ lives and in your employees’ lives.”

THE FACEBOOK GENERATION

Strictly speaking, Maffin told delegates at the IBABC meeting, members of the FaceBook generation are comprised of anyone who uses the computer-based social utility — which includes applications allowing picture-posting, e-mailing and instant messaging, to name a few. But typically, the generation refers to people between the ages of 17 and 33.

Maffin cited figures showing the ubiquity of FaceBook: 20% of people in Vancouver have a FaceBook account, as do 19% of Torontonians.

The FaceBook generation is well-connected, Maffin observed, spending almost six hours a day on electronic devices supporting personal communications. “They are absolutely connected to each other,” he said. “They are informed all of the time about what their friends are doing. Text messaging is everywhere.”

To the extent that the generation can be characterized, its members are highly creative and are keenly aware of their own sense of uniqueness, Maffin noted. Unlike past generations, which were guided by personal ethics such as job security, money, individual egotism or a healthy work-life balance, the FaceBook generation is more likely to gravitate to work that is meaningful to them and their communities, Maffin noted.

“They want to change the world,” he said. “They want their time working for their employer to mean more than just helping you pay your mortgage. It has to be relevant not just to the employer, but to them, to their community, to their environment, to the world, and so forth. They want to align their time with their personal values.”

And so they are more likely to respond to creative recruitment methods that clearly indicate what the industry does for the communities in which people live, he added. And the creativity must be apparent, without necessarily being articulated.

Pointing to an example of a successful promotional campaign, Maffin noted Google recently launched an online campaign in which it requested people to produce and send the company brief video clips. The only stipulations were that the clips had to show people moving the Google mail icon as creatively as possible from the left side of the screen to the right side of the screen, and it had to be done within a four-second timeframe.

Within a week, Google received 1,169 video submissions from 65 countries around the world. The clips were spliced together to look like a very long chain of people handing the Google mail icon to each other. The final video said nothing about Google, Maffin observed, nor did it include company advertising, other than the mail icon. Google posted the completed product only on YouTube. Within a week, Google received more than 7,000 job applications.

“Was this a recruitment campaign?” Maffin asked rhetorically. “No. Nowhere in [the video] did it say, ‘We’re cool, come work for us.’ But [the video concept itself] said: ‘We’re cool, come work for us,’ if you know what I mean.”Google, he noted, had successfully tapped into the creative sensibilities of the FaceBook Generation.

Insurers and brokers wishing to tap into this creativity need to spend some time figuring out how to articulate its values in a way that might appeal to the FaceBook generation. He said this means going beyond the typical, “dreaded,” boilerplate “mission statements” that do little more than get posted on the company wall and become forgotten. Typical, ineffective mission statements almost always say the company strives to be “the best at delivering products and services,” Maffin quipped.

Much more effective, call-to-action mission statements examples include MacIntosh’s “Think Different” television ad campaign a few years ago, said Maffin. The ad splices together video clips of visionaries such as Martin Luthor King, Amelia Ehrhardt, Mahatma Ghandi, Muhammed Ali and includes narrative that salutes creative, “crazy,” misunderstood geniuses. This type of campaign appeals directly to the FaceBook generation’s sense of uniqueness, he said.

GUARANTEED REPLACEMENT COST

Guaranteed replacement cost (GRC) coverage in personal lines seems to have been dragged into the hot debate in B. C. about insurance-to-value.

The topic certainly generated discussion during the CEO panel at the IBABC’s 2008 trade show and conference.

GRC coverage typically promises to rebuild a home or a building after a total loss despite the limit shown on the policy. Insurers provide GRC coverage in homeowner policies, but some worry under-valuation of properties — and resultant premium inadequacies — threaten to undermine the very same consumer protection that GRC is supposed to provide in the event of a loss.

Depending on the point of view, GRC coverage is either a generous boon to the consumer, or a license for homeowners to neglect the proper valuation of their property.

AXA Pacific Insurance Company executive vice president Jennie Moushos outlined early in her presentation the argument for eliminating the GRC. Some insurers, she noted, argue that removing the GRC would provide homeowners with the incentive they need to properly value the possessions in their homes, since the GRC would not be available to cover them otherwise. The moderator of the panel discussion, IBABC CEO Chuck Byrne, pressed the CEOs on what they thought of this argument.

During the question-and-answer session, panelist Kevin McNeil, the president and CEO of Gore Mutual Insurance Company, summarized the observations of most panelists when he said that although GRC “in theory works, practically it doesn’t.”

Chris Luby, the vice president of branch operations for Wawanesa Insurance, agreed, making the case for restricting the use of GRC coverage. “If we have limited GRC, assuming a [homeowner’s] policy in which they are selecting a limit, then that gives [consumers] a little bit of an incentive to say: ‘You know what? I do have an upgraded kitchen,’ or ‘I do have a finished basement’ or as a matter of fact ‘I did spend $100,000 on the kitchen.'”

Panelist Ken Keenan, the president and CEO of Canadian Northern Shield, shared the other CEOs’ qualified lack of support for GRC as it stands. “When I came out here [to western Canada] in January [2008], I had never heard of GRC,” Keenan said, adding that he was a bit taken aback by its take-up in western Canada. “But we are where we are, and I don’t think removing the GRC overnight is the answer, because it would throw the market into turmoil. I’ll add a caveat that the man who invented the GRC should be taken out of the room and severely disciplined.”

Byrne questioned whether Moushos actually agreed with the critique she summarized in her presentation. She responded: “For us [at AXA], it wasn’t the removal of GRC we were suggesting.” She said GRC was good for the consumer “but what has happened over the years is how we’ve applied this concept, and that’s where the dilemma comes in, in terms of consistency. And we created that problem of inconsistency.”

After the session, Byrn e made it clear homeowners do not deliberately under-value their homes for any reason (much less, reasons related to the GRC).

Rather, values are skewed because of a myriad of reasons, some of which have to do with the assumptions valuation software is making when calculating reconstruction values.

Like it or not, GRC in personal lines “is there,” ING Insurance Company of Canada president Derek Iles observed. Not only that, but ING is preparing to introduce GRC for commercial lines coverage.

“We are piloting GRC for commercial lines,” Iles said. “The reason we are doing that is because we think there is some opportunity for customers in specific segments, with the right controls and the right appraisals being done, the loss controls, the follow-up and execution, to get the pricing right and then you have to execute it long-term and keep it that way.”

Moushos described the timing of developing GRC for commercial lines as “very dangerous.”

“We still have to get our act in order for personal lines,” she said. “We’re all over the map. Let’s get some consistency and discipline [in the area of insurance-to-value first].”