KIRI, Report on 'The Spread of Influencer Marketing and Insurance Companies' Responses'
[Asia Economy Reporter Ki Ha-young] As the global influencer marketing market rapidly expands, related insurance products are being launched in major countries overseas. Influencer marketing refers to marketing that utilizes individuals who exert influence on SNS and other platforms.
According to the report "The Spread of Influencer Marketing and Insurance Companies' Responses" recently published by the Korea Insurance Research Institute on the 22nd, overseas insurance companies are introducing insurance products related to various risks that influencer marketing may cause.
UK-based specialty insurer Hiscox has launched a product that covers damages up to ?250,000 (approximately 391 million KRW) for influencer breaches of advertising contracts, violations of advertising regulations, intellectual property infringement, defamation, and violations of personal information protection. Beazley, a Lloyd's partner, has introduced a customized insurance product for influencers that compensates for legal costs arising from influencer negligence, defamation, intellectual property infringement, and investigation costs by the Advertising Standards Authority (ASA). Additionally, Canada's Align has launched the "Social Media Influencer Liability Insurance," which covers legal liabilities that may arise from influencers' online activities.
The launch of such insurance products indicates that as the influencer marketing market rapidly grows, the risks faced by companies utilizing it have also increased. For example, companies using influencer marketing may be exposed to risks such as liability for compensation and copyright infringement due to inappropriate behavior or speech by influencers. Influencers themselves may face compensation issues due to lack of expertise. Influencers may fail to disclose that they received compensation from companies or may engage in false or exaggerated advertising due to misinformation. Furthermore, influencers may cause consumer harm such as refusal of exchange or refund due to defective products or becoming unreachable after selling products.
Major countries overseas are also preparing related measures to reduce side effects from influencer marketing and protect consumers. The U.S. Federal Trade Commission (FTC) has specified the scope of influencers and announced guidelines on key disclosure items during influencer marketing. The Canadian Competition Bureau also requires influencers to clearly disclose their relationship with companies when posting and to reveal whether they received commissions, gifts, or services as compensation. The German Federal Media Authority has stipulated related regulations so that influencer marketing is classified the same as TV and radio and is subject to media law regulations.
The influencer marketing market is expected to continue its high growth. The U.S. economic media Business Insider forecasted that the influencer marketing market size will grow from $8 billion last year to $15 billion in 2022.
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