At this year’s 2011 ACORD LOMA Insurance Systems Forum, there are few topics that are being discussed more than the perceived urgent need for insurers to develop and implement a social media strategy before the tsunami of customer demand overtakes them, and leaves them bruised and broken.
During the conference, however, I have had the opportunity to informally address this issue with a number of insurance executives, and it seems that the social media wave for insurance may be more hype than reality. Asked specifically about demand for social media connectivity and strategy, most of those I spoke with reported that it just isn’t there with their customers—at least not yet.
Other carrier executives pointed to what they perceive as a nightmare of regulatory issues that could arise if and when insurance business is transacted via social media sites like Facebook. While they didn’t question the value of a social media strategy, especially in reaching younger customers as they emerge into the workforce, several executives were unsure about how such a strategy should be implemented, and who should be in charge of it. If I were to bundle up all the comments I received into one neat package, I would have to stamp “caution” on its face.
Still, just about everyone agreed that they wanted to dip their toes into this potentially profitable pond. One executive said his company is trying to develop a strategy to use social media internally to help bring better communication and more efficiency to that company’s business processes. It seems that in this case, as with most technology developments, insurers are adopting a wait-and-see attitude. That should come as no surprise, but it does indicate that the messages of urgency about adopting social media initiatives are not being heeded.
Should they be? I can only point out that insurance, for the most part, is not a business of immediacy in normal daily operations. Thus, the instant communication offered on social networking sites would probably have more marketing benefits, allowing insurers to schmooze with customers and potential customers. The value of such informal interactions, however, should not be underemphasized. We do tend to buy from companies we like.
In addition, social networking use has obvious advantages for insurance claims adjusters and others in the field who must respond immediately to disaster situations. Social networking should see solid growth in this area.
So is some kind of social networking program for insurers an imperative? No, but for certain parts of what we do, it could be a really good idea.
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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