Return of the Guru

Social Media Adoption: Is it as Viral as we Think it is?

Ara Trembly
Insurance Experts' Forum, May 24, 2011

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.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at ara@aratremblytechnology.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (1)

The same apprehension prevailed at the dawn of the internet, email and ecommerce!

The early adopters in the P&C insurance space are Geico and Progressive. Have they not both succeeded well beyond the expectations of all?

Most prognosticators of the time forecasted failure. Both companies succeeded because they had the advertising spend to overcome the barriers.

Today, the advertising spend is being challenged by social media. It is being leveled by social media. Social media is free. Brand reputation in the social space is earned not bought.

Posted by: Brett Meyers | May 28, 2011 10:33 AM

Report this Comment

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Driving Growth Through Distribution Management

In the current hyper-competitive marketplace, many carriers are focusing on improving their distribution practices as a key technique for driving growth.

The Start of a New Era: Digital Retailers and Insurance

Insurers from all around the world are making great efforts to become digital.

Google and Insurance: One Year Later

Google is getting the approval for selling insurance on their compare site in a large number of states via a number of different insurance partners.

How IT Managers Can Get Close to Policyholders

Four steps CIOs need to take to lead insurance organizations to greater “customer obsession.”

Strategic Initiatives for 2015: Making Sense of the Shifts

Insurers must choose between embracing innovation or just continuing with business as usual and run the risk of becoming a casualty in the new competitive battle.

To Stay in the Game, Insurers Must Aggressively Embrace New Consumer Technologies

Emerging technologies displayed at the CES could be some of the greatest change agents since the introduction of the Internet, offering breakthroughs that could challenge many businesses.