Crisis conditions and hard times often serve a positive purpose in bringing people and factions together in an effort to fight a common problem. When it comes to our current economic woes and possible solutions, however, it appears that insurers and agents are—if anything—headed in opposite directions.
IVANS Inc. recently surveyed carriers about social networking use and found that about half the respondents use LinkedIn and/or Facebook as a daily business tool for communication. This is happening even though a return on investment is difficult to measure for both, says IVANS. The survey was conducted electronically July 12-16, 2011, and the results represent responses from 120 property/casualty insurance carriers from across the United States.
On the agent side, however, the story is a bit different. IVANS reports that 52 percent of agents surveyed in another study said they do not engage in social media and, of those who do, only 14 percent use it to enhance customer service, citing lack of resources and having to compete with carriers for customer attention as barriers.
These comparative results are disturbing on several levels. Certainly, many agents do not have the financial or human resources to create and maintain a meaningful program of social media communication with customers and potential customers. Markets are very tight and for most agents the thought of funding a new initiative—one that has not yielded a proven ROI among carriers—makes very little sense. But there are other problems as well.
If independent agents feel that they must compete with their own carriers for the attention of customers that belong to both agents and carriers, Pandora’s Box has indeed been opened. Before 2008, agents and carriers could at least pretend that they were working together in the noble mission of supplying services and products and meeting customer wants and needs. Now, however, it appears that carriers are asserting their financial superiority to gain and hold customer attention, while agents are left out in the cold because they have neither the time nor the manpower to compete with the insurers with whom they do business.
And why should there be such a competition? The sad answer is that when business gets tight, more powerful entities will have the clear advantage in attracting and keeping the business that is still out there—even at the expense of those who should be their business partners.
According to IVANS President and CEO Clare DeNicola: “These findings indicate that for carriers and agents to realize the full potential of social networking, they need to develop joint social media strategies that cultivate customer relationships and improve agent-carrier communication.”
I think this is true. The real question is whether or not carriers are motivated to develop these kinds of jointly beneficial strategies in what is essentially a dog-eat-dog market.
Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.
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