Return of the Guru

Social Media: Are We Talking About it Because There’s Nothing Else to Talk About?

Ara Trembly
Insurance Experts' Forum, June 21, 2010

Object-oriented programming, CRM, SEMCI, straight-through processing, SOA, cloud computing … the list of hot topics in the insurance computer technology world seems endless. Then again, if we didn’t have some titillating tech topic to talk about, what would we do for education sessions at our conferences?

At various times and in various places, all of the above examples and more were considered the thing—the critical technology/methodology that insurers had to have in order to stay ahead of the technology curve and—most important—to keep pace with their competitors. Interestingly, most of these technologies have become part and parcel of the systems we build for insurance and financial services—important and useful, but in the end, not the panacea many had proclaimed them to be.

The latest item to hit the insurance tech griddle is social media technology. There was plenty of hubbub about social media at the recent ACORD LOMA Systems Forum, and at IASA there were two sessions dedicated to the topic. In one of those sessions, moderated by yours truly, panel member Mike Sciole, CIO Burlington Insurance Group, Burlington, N.C., asked a key question: “Are we only talking about social media because there’s nothing else to talk about?”

My panel members responded in various ways, attempting to justify our topic, but now that I think back on it, no one mounted a serious defense. I had to agree with Mike’s idea that maybe we were talking about this topic because we really didn’t have anything more interesting to opine about. If that’s true, then another question begs to be asked: “Is social media a really important issue for insurance enterprises?”

The answer, I believe, depends on who you are.  If you are your company’s chief security officer, social media is extremely important, because—as some of our panel acknowledged—social media websites are the new favorite stomping grounds for hackers, cyber-criminals and other no-goodniks. On the other hand, if you are the average employee at an insurance company or brokerage, social media may only be important in that you want to check your Facebook account while at work (The security risk is some else’s problem, such folks mistakenly tell themselves.).

If you work in your company’s legal department, social media constitute a huge risk class, in that the law has yet to be determined on topics such as whether or not a company’s social media posting constitutes an official statement, contract, etc., and who is liable if there is a problem. You’d probably prefer to let some other companies take the hits and establish the case law before you approve venturing forth on social media campaigns.

Maybe you’re an insurance marketing executive looking to get any edge you can in the war of information. In that case, social media looks like a dandy new channel that can give you access to customer populations (ostensibly the young and privacy-challenged) that you would otherwise not reach. Again, the security and legal risks are something that “someone else” needs to deal with.

Overall, this naturally fractured view of the value of social media is the very reason why we must talk about it. The conversation needs to focus on the good of the company as a whole—instead of the benefits or threats to this or that part of the operation.

Of course, I think I see Mike’s point. Eventually, we will reach a place where social media has been helpfully integrated into our enterprise and our consciousness, and it will not be any more controversial than any of the other hot topics that have burned their way into our hearts and minds. Until that happens, however, the conversation must continue—whether or not we have anything else to discuss.

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 (6)

Social media surely will pass into the usual, as quickly as wireless technology did: first it was the buzz, then it was the norm. I also imagine social networking will ensure the perpetuation of "traditional" communications media: formal print and online publications, marketing collateral, direct mail, etc. That's because social media comprises two self-precluding elements. The first is inherent brevity. Social media doesn't permit the telling of fleshed-out stories. In the case of Twitter, 140 characters barely permit coherence. The second self-precluding element is cluttered ubiquity. Just as things like SharePoint sites quickly replicate the unfathomable chaos for which they were erected to serve as alternatives, so too social media. If it's all there, all the time, relentlessly streaming, people searching for meaningful information will seek the relative peace and intelligibility of complete stories, well-told. It's human nature and history.

Posted by: Mark OB | July 31, 2010 12:13 PM

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For Gen Y - the technology natives, their community interaction is through social media and if insurance industry hesitates to leverage it, will be left behind ! It is a great opportunity out there for the marketing executive !

Posted by: Sri B | June 25, 2010 3:49 PM

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When in doubt, go with, "It Depends."

Social media is free (for the most part) and it cuts out the middle message man out, allowing direct communication with customers. For these reasons, it will remain a critical part of the insurance marketing strategy.

I completely agree on the privacy and risk issues, but with social media usage on the rise across all age groups, like you say, it will eventually reach a stage of ubiquity that allows it to function as an everyday process. The fact that a health insurance company can find out if you skydive or drink heavily on weekends by monitoring Facebook is just too tempting to ignore.

My gut says legal precedent will come sooner than later.

Posted by: Unknown | June 25, 2010 11:21 AM

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Very interesting perspective. I agree that we will one day look back and smile at how pervasive this conversation is today. Remember in the mid 90's when insurance company's were asking questions like; "should we have a web site?", "what will our brokers think?", "does this mean we are going direct?"

Today, that all seems preposterous. I predict that within two (maybe three years tops) social will be so integrated into how we do business that the subject itself will be moot. It's just business.

Posted by: John J | June 25, 2010 10:58 AM

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Spot on!

Posted by: Charlie C | June 25, 2010 10:40 AM

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As an IT consultant I am fully aware that IT management is struggling with whether social media is productive or obstructive for companies and their employees. Software is being developed and policy and restrictions are being decided everyday by IT managers. The security of company networks are at stake but the potential for innovation using social media is a large enough carrot for the discussion of how to properly utilize the medium continues. Palo Alto networks came up with a whitepaper which will explore the issues surrounding social media in the workplace. It is important to not only understand the immediate benefits of doing business how one lives, but the threat it presents to a company's greater ROI and productivity when it comes to the server's safety and security.

Posted by: Kelly M | June 24, 2010 1:44 PM

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