Remember way back in 2007 when companies were trying to findways to sell insurance on Second Life? In the good ol' days,MySpace used to be the online hot spot, but Facebook pased it by in2008, according to digital marketing analyst firm comScore.

And speaking of 2008,Facebook is so last year. A report by UK communicationsregulator Ofcom revealed usage of Facebook by the next generationof insurance consumers–the 16- to 24-year-old group–declined in2009 for the first time ever. Twitter is the place to be today–andyou really should get your iPhone app on the market!

Welcome to doing business in the rapidly changing world of Web2.0. In this environment, the trick for insurers is to have boththe infrastructure and business processes in place to takeadvantage of market opportunities that best match the ways theywant to communicate and do business with customers and tradingpartners.

“There is a high likelihood individual sites will change,” saysMatt Lehman, Web experience director at Progressive. “Our objectiveis not simply to support the current venues but to put theinstitutional learning in place to be ready for what's next in Web2.0 and to be where our customers are.”

Compounding the challenge of rapid evolution is “Web 2.0″ is abroadly defined term. “Although more and more, Web 2.0 has come tomean participatory media–blogs, customer reviews, wikis, socialnetworking sites–it can describe a lot of different technologiesdepending on whom you are talking to,” says James Wisdom, directorof new media at Aflac.

Technology consultancy Novarica, for instance, includes socialmedia, blogs, and wikis in its definition of Web 2.0 but also addsmash-ups, the cloud computing model, and AJAX Web applicationdevelopment. But rather than quibble about the exact definition,insurers should instead focus on the capabilities represented bythe “generation 2.0″ of the Web, according to Matthew Josefowicz,director of Novarica's insurance practice.

The majority of carriers in a 2008 survey by Novarica were atleast “playing around” with Web 2.0 (see graph, p. 17). “Some ofthe big national brands certainly are approaching social networkingas part of their online marketing strategies. There are companiesthat have a presence on Facebook, building interactive quizzes, andpost blogs to draw users into traditional Web channels,” Josefowiczsays.

However, the percentage of insurers actually seeing a realbusiness benefit from Web 2.0 was much less; for instance, onlyfour percent of insurers were deriving value from the usage ofsocial media. Although Josefowicz contends this percentageundoubtedly has increased from when the study was completed lastyear, creating business impact from Web 2.0 in general, and socialmedia in particular, remains difficult for carriers.

“It's an important part of an online marketing strategy, butit's not changing the world,” he says.

FINDING VALUE

CIGNA, Aflac, and Progressive are three insurers that have foundvalue in Web 2.0 tools. For Progressive, the first major carrier tohave a Web site and sell policies online, supporting the latestonline channels is a natural extension of the company's marketingstrategy.

“It's in our DNA,” says Lehman. “We recognize we need to play inall these spaces to be consistent with our goal of listening andinteracting with our customers wherever those customers are. Web2.0 also is a great way to get qualitative feedback.”

In addition to a presence on Facebook and Twitter, Progressivehas a YouTube channel that features both commercial content as wellas consumer safety and education videos. The company's MyRate blogincludes information and commentary related to its pay-as-you-driveauto insurance program.

Progressive's intent is to augment, not replicate, theprogressive.com experience on different venues. In deciding whatWeb 2.0 venue to support, Progressive follows a process thatmatches features to purpose.

“We work to understand why some sites are popular withcustomers. Twitter is a great tool for one-to-many communicationsand for real-time search and understanding what people are sayingabout Progressive or our competitors. Facebook is a great mechanismfor local interaction and sharing,” Lehman says. “We look at theinnate benefit of a particular site and measure each by metricsthat are available–followers, fans, views, and so on.”

Aflac has a clear objective for Web 2.0. “We want to be engagedwith our customers in terms of the channels they consume,” Wisdommaintains.

After identifying a channel popular with customers, Aflacevaluates how well it matches the company's brand image. “Everysocial media outlet has been targeted to a particular audience,”Wisdom says. “We look at the focus of those platforms to determinewhether being on them will reflect positively on us.”

Facebook was a perfect venue for Aflac's trademark “spokesduck,”which has its own page. “Facebook is perhaps unique in that it hasspanned every age bracket and every demographic, whereas othersites such as Bebo focus on a much more limited demographic,”Wisdom remarks.

For Aflac, the impact of Web 2.0–Facebook in particular–hasexceeded expectations. “We anticipated the duck would have about15,000 fans in a month,” he says. Instead, it had 80,000 in itsfirst month and nearly 150,000 after three.

“Given fans have about 170 people [each] in their network,that's potentially millions of additional impressions,” Wisdomsays.

Aflac uses the Facebook Insights analytic tool to slice and dicefan demographics and engagement activity.

“One of the things that amazes me is that the duck's page has ahigher engagement level than all the top brands we tested,” Wisdomreports. “How our audience members are different is they visit theduck's page frequently and thumb up content, or they'll postcomments to his wall. So, what we're achieving is a brand that notonly has a presence out there but an engaged fan base that isexcited about it.”

However, whether that excitement translates into revenue, Wisdomcan't say for sure. “It's difficult to measure social media ROIabsent of a larger ROI enterprise model that can deal with mediaimpressions across various platforms,” which the company currentlydoes not have but is a key objective for the near future, hesays.

Progressive uses preexisting internal tools to track new sales,customer saves, and other metrics related to traffic on various Web2.0 venues and also monitors those venues using tools available atthe sites themselves. While Lehman declined to assign a dollaramount to the overall impact, he says it has been measurablypositive.

“We track sentiment of what's being said about us and ourcompetitors. In our Facebook page, we have acquisition banners wegenerate click-through from. We also have features that encouragecustomer engagement, such as a pet photo upload. On the customerretention side, we track customers we save by reaching out to themthrough these venues or by directing them to other service channelswhere we can better help them,” Lehman explains.

PUSH VS. PULL

Although the advent of the Web itself helped put moreinformation at the fingertips of customers, information alone maynot generate a sale or solve a problem. Effective two-waycommunication is essential–a capability not provided bybrochureware sites.

Used intelligently, social media addresses the longstandingproblem of asynchronous, one-way communication among carriers,customers, and agents in the insurance transaction, while richInternet applications and other Web 2.0 capabilities providetargeted information and create greater customer engagement.

“Web 2.0 has a different delivery model. It's bidirectional, andwe believe there is a significant audience to be garnered from it,”Wisdom says.

Carriers also have discovered one of the key marketingpropositions of Web 2.0 is, instead of simply pushing informationout to customers and prospects, the interactive and participatorynature of networking venues pulls interested customers in.

For just over a year, CIGNA has been using Web 2.0 to delivercontent to the public–publishing videos, creating podcasts, sendingtweets. But earlier this year, the company began using social mediamonitoring software from Filtrbox to search tweets, wall posts,blogs, and other consumer commentary for issues related to CIGNA,then reaching out to those individuals to see whether they needassistance.

“We're not just trying to push out information; we're trying topull in people who need help and trying to address their issues oneby one. That's a better approach,” says Joe Mondy, assistant vicepresident of IT communications at CIGNA.

Initially, Mondy was solely responsible for monitoring thisactivity, but this proved problematic when customers beganproviding personal information through insecure social sites.

“When people say they want to do more communication on socialmedia, some don't realize how open that is. Sometimes, informationwe can't share because of our own internal controls and regulations[customers] will willingly divulge. Therefore, while we approachpeople on various sites, we move the interaction into a channelthat can be secured and protected,” Mondy says.

Additionally, the company quickly discovered another challenge.Customers calling a traditional call center or using aCIGNA-provided Web tool would choose the appropriate options for aspecific question. In contrast, tweets and postings could cover anyissue on any number of products. The company created a team knowninternally as “iSolve” to address this diversity.

“What makes the iSolve team members different from everyone elsein service is they are the folks who have input to all our aspectsof service–health and medical plans, dental, and pharmacy. Theyhave a 360-degree view of customers, whereas in the past, there wasone person for pharmacy, one for dental, one for medical, and soon,” Mondy says.

CIGNA has been pleased with the impact of its Web 2.0-basedcustomer outreach. “People are stunned someone actually islistening and cares and responds to them,” Mondy says.“Unfortunately, the notion most people have in their minds aboutinsurance companies is we are a castle with a broad and deep moataround us and we want to avoid interacting with individuals. Buteven if that were ever true, it's certainly changing today. We wantto be accessible to members 24/7, and part of that is socialmedia.”

Although Mondy reports nearly every individual CIGNA has reachedout to has responded positively to the company's proactiveapproach, requests originating from social network monitoringaccount for only a tiny fraction of the 100,000 members servedthrough CIGNA's traditional call centers. “It's really a nascentthing, but it's still an avenue we want to support,” he says.

Both Aflac and Progressive likewise monitor tweets and Facebookpostings and in general monitor brand buzz across the Web. “We lookfor positive testimonials, which are far more frequent thancomplaints,” Wisdom says. “However, we also look for customers whoare complaining about the brand, and we identify whether there'sanything we can do to service those customers better. That hasunique challenges by channel, because oftentimes people do notprovide enough information where we can identify them foroutreach.”

“We are out on a real-time basis searching for areas where weare being mentioned,” Lehman says. “We've set up an infrastructureinternally to do that, which is working quite well. We are pullingin or reaching out to prospects at the same time we are using thesemedia venues to push out content that is relevant and timely.”

Progressive also uses social media for catastrophe claimresponse. “In major weather events, we've used Twitter tocommunicate out a message in a rapid and real-time basis,” Lehmansays. “That's proved to be an effective means of quickly andconcisely disseminating catastrophe-related information.”

BLOGS, WIKIS, AND INTERNAL
COLLABORATION

Web 2.0 is more than the 2009 equivalent of a party line. CIGNAuses Web 2.0 internally for information sharing and collaborationpurposes. The company also has its own interactive applicationsavailable through the “itstimetofeelbetter.com” portal, includingthe “CIGNA Water Challenge,” where the company donates clean waterto children in India for correctly answered questions.

“We've provided a lot of educational information in anentertaining format to help people understand the impenetrableterms the insurance industry can use,” Mondy says.

The company also has piloted a presence on Second Life not as ameans to sell insurance directly but as an informational venue.“We're trying to create virtual communities where people who wouldnot feel comfortable with some activities, such as going to aseminar on weight loss, instead can attend as an avatar and learnthings differently,” says Mondy.

The results of the pilot have been “intriguing,” Mondy adds, butthe company does not yet know whether the project will go beyondpilot phase. “We're continuing to review the results to find thebest way to package and deliver it,” he explains. “We want to besmart about how we ultimately and formally introduce it, because ifyou put out something that is half-baked, it will turn people off.We're taking a deliberate approach so that when we do introduce it,it's at the appropriate time, targeted to the appropriate people,to get the
appropriate response.”

Aflac currently is working on an aflac.com redesign, targetedfor year-end launch. The company is striving for what Wisdom calls“a higher level of Web 2.0 integration” as well as cross-venueconsistency. Aflac also needs to address the fact that, although ithas a well-recognized brand, not everyone fully understands whatproducts the company provides, indicates Wisdom.

“We need to create branding components that will cross over fromprint to broadcast to sponsorship to social media,” he explains.“We want to provide an enhanced brand to our customers acrosschannels, better defining our product and our valueproposition.”

One of Progressive's goals is to make as much of its sitecontent as “sharable” as possible. “We've been working toward thatsince late 2007, when we added RSS feeds,” Lehman notes. “We addedpodcasts, photo uploads, and slideshows as well as a 'share this'box on progressive.com. The definition of 'sharing' continues tochange, and we continue to adapt.” Progressive also uses blogsextensively within the company for interaction among seniorleadership and between leadership and staff, as does Aflac.

Blogging and using other Web 2.0 technologies within thecorporate walls are smart applications of the tools, according toJosefowicz. “The real power and potential of internal wikis andblogs is they move conversations out of e-mail and into a morepublic forum where they are easily accessible and searchable. It'snot just two underwriters e-mailing each other about a particularcase; it's taking that knowledge and making it available so thatwhen others are faced with a similar case, they have access to it,”he points out.

“The systems themselves are relatively inexpensive to set up andwork with–the investment that needs to be justified is relativelyminimal,” Josefowicz asserts.

PUBLIC SCRUTINY

For insurers, a potential downside of social media is itsopenness.

“There is a great deal of concern with the notion of informationcontrol,” Mondy says. “Number one, we train our people very well interms of what information can be shared and what can't be. Wedirect people how to take discussions that may veer into personalhealth information into realms where that information can beprotected and encrypted. We did a lot of upfront work to ensure wehad those 'bright lines' before we ventured into social media.”

Additionally, insurers may be concerned about negative feedbackin the public arena. Insurers that wish to establish a presence inparticipatory venues need to assess that risk.

“We do need to tread these waters carefully,” Lehman says. “Wepreview comments on the MyRate blog but only to look for profanityor posting of personal information, which is consistent with othercorporate blogs out there. We leave negative comments out there,and where appropriate, we will respond. Part of engaging customersin this medium overall is to allow for what could be negativecomments. We think it's an important piece of the puzzle.”

Wisdom agrees. “If we see a specific complaint, we'll try toaddress it with the customer. If it's a generic complaint, peopleare entitled to their own opinions,” he says.

Aflac has witnessed a definite upside to having a publicpresence in the Web 2.0 space, he adds. “We see 'microtestimonials' constantly–people talking about the impact we havehad. That shows up on the duck's page as well as on the posters'own networks. Because that testimonial isn't coming from us, it'smore credible.”

MOVING TO 2.0

It's tempting for insurers to dismiss the hype surrounding 2.0as simply the latest fad. Josefowicz maintains this is a riskyoutlook.

“We're trying to caution insurers they should not view the Web2.0 hype as many of them looked at the 'Web 1.0' hype,” heexplains. “If you look back at insurers that didn't want to haveWeb sites or didn't want online quoting capabilities, certainly itwas very high in the early days of the Web and is even relativelyhigh today. But the advantage to companies that could leverage itintelligently and balance the risk management with the opportunityis substantial.”

While conceding “nobody is going to make money by being the bestWeb 2.0 insurer,” Josefowicz advises carriers should be aware ofcapabilities in the marketplace and incorporate technology andfunctionality where it makes sense.

“It could be using internal social networking and user-generatedcontent to strengthen relationships with geographically distributedstaff. It could be wikis and blogs for agent relations, or socialmedia for online marketing,” he says. “It's always easier to say noand put your head in the sand, but that's not the best option.”