Insurance Industry Picks Up Social Business Slack

In reviewing the latest stats on social media adoption across Fortune 500 companies and industries, something noteworthy pops out: the insurance industry as a whole ranks right in the middle in terms of social networking adoption. In previous studies I have seen, insurance has ranked near the bottom of the list of industries when it comes to embracing this emerging channel for customer communication and employee collaboration.

So at least the large P&C insurance corporations, as the University of Massachusetts study shows, are active participants in the social media environment.  More than eight out of 10 use Twitter in some official capacity, seven out of 10 use Facebook, and one out of five have official blogs—all in line with what everyone else is doing.

Social Network Adoption Among the Fortune 500, by Industry:

                                                               Twitter                     Facebook              Blogs

Food Consumer Products                        93%                        86%                        21%

Aerospace and Defense                          86%                        71%                         7%

Specialty Retailers                                   86%                        89%                        25%

Insurance: Property/Casualty                   81%                        69%                       19%

Telecommunications                                80%                        80%                        40%

Chemicals                                                76%                        53%                        18%

Commercial Banks                                   75%                        70%                        30%

Utilities: Gas and Electric                         73%                        50%                        27%

Motor Vehicles and Parts                         44%                        44%                        19%

The question is, of course, are insurers, as well as their counterparts across the other industries, getting value out of their social business efforts? A recent study conducted by McKinsey suggests that the value points for insurance companies differ within the industry: For life insurers, the greatest productivity increases can be potentially seen within sales and marketing, while P&C carriers can take advantage of social platforms to boost operations and distribution productivity. 

Across financial services in general (including banks), social technologies could help generate between $256 billion to $423 billion annually in value, globally.

“Our research suggests that the application of social technology to enterprise collaboration holds the biggest value potential for the industry,” the McKinsey report adds. Information such as age, educational attainment, and current or past employers can be used to build a more accurate risk profile to price insurance premiums.... Social technologies provide an excellent view into the lives of customers and potential customers. On social media, people broadcast the life events that signal selling opportunities in financial services.”

Also, the report adds, insurance companies “can relay relevant and consistent information to branch office employees and agents using social media. Experts can relay answers to many employees and agents simultaneously, and the knowledge can be retrieved by others and amended as needed. This has the potential to significantly expand the capacity of each expert to address the daily flood of questions about insurance products that must be answered to complete a transaction.”

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

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