New York Life Learns to Love Social Networking

By Dennis McCafferty  |  Posted 2010-12-09

Among its recent posts, New York Life Insurance Co. has tweeted that Life Insurance Awareness Month spokeswoman Leslie Bibb has “been in a bunch of movies. Name your favorite!” (Hint: You may have caught her in Talladega Nights.) As part of a Twitter crowdsourcing initiative, the company has also invited followers to send real-life stories of people and families positively affected by its services.

On its Facebook page, New York Life has directed traffic to its audiocasts on financial guidance, and it announced its movement up Fortune magazine’s ranking of global corporations to 221st place and its 64th place ranking on the Fortune 500 in the United States. The company even encouraged users to hug their grandparents on National Grandparents Day.

The insurer’s LinkedIn page is more buttoned-down, detailing a long, proud corporate history that goes back to 1845 and stating that the company now oversees more than 20,000 employees and licensed agents in the United States. Links to more than 6,900 of those agents and employees are posted on the site. One individual details his wealth of professional experience, having sold everything from “encyclopedias to ice cream and cars to insurance and financial services.”

Each of these social networking sites performs a valuable function. However, until recently, they would have been forbidden at the company, despite considerable interest in using them for business.

“Our agents—and the managers who recruit them—have been using these sites for a long time for their personal use,” says Tom Shea, first vice president at New York Life, who oversees delivery of IT systems to agents and serves as CIO for the agency department. “They’ve seen the growth of interest there, and they’ve wanted to use these sites for business.

“Agents can use them as a way to connect with customers. Our recruiters see these sites as effective tools to communicate with potential agents. This is also a great way to get our branding messages out and highlight our strengths.”

Until this year, however, New York Life had a very simple policy when it came to the use of social network sites for official purposes: “No.” As in, no social media was allowed in any official capacity by agents. This meant no Twitter tweets, Facebook status updates or LinkedIn profiles.

The company knew it was missing out on an opportunity in the process. But it, along with the rest of the insurance industry, needs to comply with a number of regulations as determined by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, a self-regulatory organization. New York Life reports to both the SEC and FINRA, and it complies with all policies mandated by these organizations.

How complicated can this get? Routine social networking posts and interactions have to be classified as either “advertisements” or “correspondence.” All these activities require considerable oversight on the part of an insurer with respect to tagging, monitoring and archiving. Content that is clearly out of bounds or even questionable needs to be blocked.

Initially, New York Life simply didn’t have the right technology to capture the electronic communications taking place on social networking sites. “It requires that you track and monitor everything, really,” says Gerard Rocchi, who is chief operating officer of the company’s agency department. “We weren’t prepared to do that at first. So, for the longest time, there was no Facebook or Twitter for agents—or anything else within the social network communities.”

Rolling Out an Initiative

All of that is changing. Using a middleware software solution package from Socialware, New York Life is now rolling out a social networking initiative for agents, recruiters and other employees. An initial pilot is under way with 750 agents nationwide.

The new IT capabilities will automate and manage social network policies and usage for New York Life’s more than 11,000 agents and field managers in the United States, creating a compliant and secure social networking experience. The solution enables social data to be captured, indexed and archived to conform to the company’s social media policy, and it allows for compliance with the SEC and FINRA regulations. The company can now “set its own rules” for official use of these sites, defining how agents, financial representatives and other employees can access an account, archive posts, interact with users and conduct other activities.

New York Life can now scan Facebook comments, tweets and other exchanges to comply with company policy and regulations. Via archiving functions, it can easily analyze companywide social networking usage from an enterprise perspective; through discovery applications, it can locate needed information throughout this social archive. The solution package allows the content to be authenticated and filtered—or blocked if necessary.

With all the focus on compliance, you’d think the respective company social media sites would be rather, well, stuffy. But that’s far from the case. The posts are lively and inviting. Instead of employing “corporate-speak,” exchanges are conversational. On the recent anniversary of Sept. 11, for example, employees shared their own often-poignant memories of their experiences in New York City that day.

Research demonstrates that New York Life is taking initiatives with its social media policies that other organizations in its industry aren’t necessarily taking: More than 60 percent of financial advisers use social networks for business purposes, spending an average of 22 minutes a week on social media activity, according to a survey that Socialware commissioned.

Nearly 50 percent of survey participants say they’ve identified new referrals thanks to these sites. But 32 percent say they don’t have a policy in place to provide guidelines for this kind of activity. In companies that do have a social media policy, only 57 percent of employees know it exists. And nearly four out of 10 respondents who use social media for business are doing so in direct violation of their companies’ policies, according to the survey.

FINRA has ruled that all social media content must be archived and audited, but 66 percent of financial advisers say they have no archiving process in place, Socialware reports. And those that do have an archiving process are often undertaking the task with manual tools.

For New York Life, manual tools wouldn’t work because of the sheer volume of content. And if a status update, tweet, or post to a site or discussion board can be easily viewed by 25 customers or more, FINRA classifies it as sales literature. (This number has already been surpassed, as more than 3,970 users have “liked” the company’s Facebook page at press time.) If the content is considered advertising, it must be reviewed and evaluated by staff. And the definition of what constitutes advertising on a social network site can be very broad.

“Anything that discusses a product or service could be considered advertising,” Shea says. “Way, way more content falls under this definition than you’d think. There are clear standards as to what you can say here and what you can’t.”

Categorizing Content

FINRA has categorized “content” within the context of this industry’s use of social media as “static” (the content remains posted until changed by the firm or individual) and “nonstatic” (interactive). Static material—such as agent profiles, wall information, and all initial postings on Twitter, Facebook or LinkedIn—would be deemed advertisements and would require preapproval.

Real-time interactions between agents and customers, as well as interactions between recruiters and agents, would be considered nonstatic content. These exchanges would not require preapproval, but the company must have procedures to oversee and retain them.

“FINRA realizes that prior approval in interactive situations is unrealistic,” Shea says. “If customers have a question on a social media site, you can’t tell them, ‘I’ll have an answer for you after my compliance department reviews it.’ But you still need to have all correspondence available for review after the fact. So that’s where the need to capture, store and archive comes in.”

Still, two common tools of the social media universe are currently “out” for the foreseeable future at New York Life: Retweets and the Facebook “like” button.

“We’ve blocked the ability [for agents] to ‘like’ something,” Shea says. “Right out of the gate, we need to be conservative and cautious about these things. It’s harder, after all, to shut something down once it’s already out there, rather than adding it on after you’ve determined that it’s OK.

“For now, we’re taking the position that, if an agent presses the ‘like’ button, it’s essentially an endorsement. Under FINRA guidance, an endorsement is the same as an advertisement. That’s going to be a difficult thing for us to oversee and self-regulate. It’s the same with retweeting something that someone else has said on Twitter. It’s an endorsement of that person’s statement.”

Currently, agents who are outside of the pilot program can still create a work-related Facebook or LinkedIn profile, but they can’t conduct exchanges with customers on their pages. And Twitter is out.

New York Life is working toward allowing all its agents to use social media sites. For now, all measurements of the initiative’s success are purely anecdotal. But those results, so far, are very encouraging.

“We’re getting the clear message from agents and recruiters who are part of the piloting process that these social network sites are highly effective business tools,” Shea concludes. “Recruiters say they are getting access to, and signing on, agents they would never connect with otherwise. Agents are definitely increasing both sales and their customer base thanks to the social media sites.

“This is the way the public expects you to do business these days.”