Nick Gerhart’s appointment as Insurance Commissioner of the State of Iowa was announced in June 2012. He officially succeeded Commissioner Susan Voss on Feb. 1, 2013, leaving his position as Vice President of Compliance and Regulatory Affairs for Sammons Financial Group. Recently he took some time to speak about his views on the industry and the role social media can play in reaching out to consumers.
How did you come to be the Iowa Insurance Commissioner?
Coommissioner Voss, who I took over from, announced she was retiring—after a very long and distinguished career in state government—almost a year before her official retirement date. That gave the governor’s office time to go and find someone to do the job. I had contact with the then-chief of staff there, met with the governor and lieutenant governor a couple of times. They liked my vision for the industry and the division, specifically how I would handle the office.
I really talked to them a lot about how I saw insurance changing over the next several years. There’s such a large industry here in Iowa; [the challenge is] striking the right balance between protecting the consumers, which is our first job, and ensuring business can be done as well. You’ve got to protect consumers—and consumer protection, in my mind, starts with making sure companies are financially solvent.
Where does education figure in to your vision of consumer protection?
I’m kind of passionate about making sure we’re taking care of the customers, making sure they can buy product, and can understand the product they are purchasing.
All these disclosure agreements… these regulations we have, can lead to … consumer confusion. Maybe we need to sit down and talk to each other about how we can make it better—ensuring the customer has access to what they need to know, but can read and understand it.
Simplified disclosures [could help]. With a long-term care product, or annuity, the disclosure is dozens of pages, probably. No one’s reading that. By the time they need to use the product, they’re calling the agents, the broker, the home office—that’s when they realize, “Maybe I don’t have the coverage I needed.” Those are the issues that end up on our desk here at the division.
A little education goes a long way. That’s really why the role of an agent is so important – their job to educate, their job to coach, their job to do what’s right for the customer.
Where do you view social media playing into consumer support and education?
I think it’s a huge opportunity to meet the customers where they’re at.
We’re one of the most active insurance departments—we’ve got some of the most followers out there [on social media]. We use it as a platform to get information out there. If we were ever to have a major catastrophe, we would be using Twitter, setting up Facebook pages to put out information.
It’s really about trying to use this as a tool to get information to customers, to the industry, even to media. It’s a good way to meet people where they are and on their terms – not my terms.
There are many challenges in the way of agents doing great insurance social media. What do you view as the biggest challenges?
Regulatory is certainly a challenge.
If you’re trying to use it as a sales or negotiation platform, I don’t think you’re going to have much success. If you’re using it following the model law on advertising—disclosure, fairness, not misleading, a balanced approach on advertising—I think it can be effective.
The other challenge is really knowing if you had any value from the campaign. The genius of Progressive and other companies with such robust marketing and building of the brand [is that] part of the build is social media. For an agent who may not have tens of thousands of dollars to spend on advertising, what social media does, whether it’s blogging or LinkedIn Pulse, it can help you become that thought leader. You don’t have to talk about the product you sell, but rather the solutions you offer for the issues people face.
So it all comes back to serving the consumer?
What you have to do is position yourself as someone who solves problems. What does an agent do? An agent helps you identify risks you didn’t know you have. A good agent should position him- or herself as the person in the community who solves people’s problems. You want to be known as the go-to problem-solver. Where so many agents drop the ball, quite frankly—they’re good at maybe acquiring customers, but they drop the ball on communicating with and keeping them. Social media could be the platform where they communicate with their customers.
On our Twitter account and Facebook account, we actually solve problems for people. We fix these things in real time. If I can figure out how to do at the state, my gosh, an agent can do it.
Do you anticipate that insurance social media marketing will become more mainstream, or at least better understood by the insurance industry?
As people start to realize social media is just media—how people are going to communicate – it’s going to be a convergence at the home office between marketing and communications… a tool you use to communicate with almost as much as you use product to cross-sell and market.
Keep that in mind: most people are going to use these platforms for people they like. How do you become a person or entity they like?
On our Facebook, 1937 people like our page. Scroll down and you’ll see we put videos out there that are relevant to Iowans, tips to watch out for and even information about tax scams. We put these things out there that people need to know about and want to learn about. We don’t just sit there and put things out there no one wants to hear about.
Meet the customer where they are, get the customer to follow you and to like you. How do you do that? Offer them value and solve problems. They’ll find you then. You have to build this trust to become someone they want to friend.