If you would expect industry experts to provide a lively discussion on topics that lend themselves to controversy, you would be right. At a town hall meeting held today at IASA's Educational Conference and Business Show in Dallas, a four-member panel discussed where insurers stand in regard to several issues, including economic recovery, IT spend and social media.
Moderated by Rod Travers, SVP with management consulting firm Robert E. Nolan Co., the panel began its discussion on the references to continued economic difficulties facing the industry that had been made throughout the three-day conference.
Matthew Josefowicz, director and insurance practice lead at Novarica, minimized what had been called a “gloomy forecast,” telling the audience that it “depends on who you are,” meaning some insurers would not be affected as deeply as others. Josefowicz cautioned the audience to consider their line of business and both immediate and long-term business goals before giving credence to economic rumors. “Most companies are dealing with their own reality,” he said. “Let’s not get too hung up on the numbers.”
Marcus Ryu, VP, products and strategy at Guidewire, pointed to two issues that insurers should consider as they look at their IT spend against a questionable economic future. “There is always increased scrutiny, especially with capital investments,” he said, “but those decisions should be motivated by a long-term plan, taking consideration of the typical business cycles.”
Karen Furtado, partner with SMA, a research and consulting firm, argued that as insurers face economic question, they are still focused on transformation. “It’s really about the business drivers,” she said, “and decisions about IT spend are tied to business initiatives.”
Wade Rugenstein, VP at The Republic Group, provided the audience with a reality check. “We take a broad approach to this,” he said, referencing a continued focus on return on investment and project value as the company’s response to economic uncertainty. “We are also focused on making it easy to do business with us, because that’s going to be an important component of this down the road (with agents).” As for his company’s larger focus on monitoring expenses, Rugenstein asserted, “That’s never a bad thing.”
Investments in existing projects aside, Travers asked panelists to respond to number of sessions held at the conference that focused on plans for social media investments. Travers provided the example of Aflac making gains dsepite a minimum IT investment. Aflac uses Facebook as a marketing tool that keeps insureds up to date on their famous duck’s daily activities. “People tune in daily just to see what the duck eats for lunch,” Travers said. “At literally no cost, they’ve found a way to reach thousands of people.”
Josefowicz questioned the cost factor, referencing the “millions of dollars already spent branding that duck.” The social media promise, he said, is not an IT issue. “It’s a powerful tool that some insurers are using to message and market their products, but it is also a complex, and difficult challenge for most insurers not using it because they don’t understand it.”
Furtado agreed, noting that people tend to confuse social media experimentation with social media strategy, referencing social media policies being created by insurers that block employees from using Facebook at work. “At a time when you are trying to attract and recruit younger workers, this is a contradiction,” she said. “You have to think of social media as a part of the larger business strategy, and even part of the enterprise.”
Ryu said it was too early to proclaim social media as transformational in the insurance industry. In response, Josefowicz asked the audience to consider the fact that insurance is a relationship and communications business.
“This is the first time in history that you can communicate with a large number of people without the demand for response,” he said. Comparing it to a personal radio broadcast, Josefowicz explained that when he Tweets or posts LinkedIn updates, he does so without expecting those who access it to answer. “This is a major sea change in how we approach the customer,” he said.
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