NU Online News Service, April 15, 3:04 a.m.EDT

As social networks continue to grow in usage, insurers shouldtake advantage of the services to advertise and communicate withcustomers in ways not available through other channels, aconsulting firm advised.

Celent in its report "Leveraging Social Networks: An In-DepthView for Insurers," defined a social network as "a group ofindividuals and organizations that are linked to each other in somemeaningful way," with examples being Twitter, LinkedIn, MySpace andFacebook.

Speaking to the rising popularity of such networks, Celent,noted that in March 2010, Facebook was the most visited Web site inthe U.S., having more visits than Google for the first time.

For insurers, Celent said, a better understanding of socialnetworks will help companies understand their target market.

For now, insurers have three reasons to participate in socialnetworking, Celent said: a cheap method of advertising, acommunication channel to customers, and tapping into a channel thatis growing in influence.

"It is Celent's view that not only are social networks here tostay," the report notes, "but they will grow to define mostpeople's experience of the Internet in the future."

Going forward, Celent said, consumers will be accustomed toseeing friends' comments in search results for financial servicesproducts, and will expect to be able to engage with their choseninsurer through the channel of their choice.

As social networkers become more comfortable with the concept ofsharing information about their behavior and location, Celent saidinsurers could respond with innovative insurance products, newpayment methods, and meeting consumer requirements on-demand. Theshared information could help inform pricing decisions and aid infraud detection, Celent noted.

"Rather than the current model of searching for content andpulling it, relevant content will be pushed to Internet usersthrough recommendations from their friends and targetedadvertising," Celent said.

Social networks come with risks, the report states, includingfree signups which mean no vetting to tell if the account islegitimate--a problem for both organizations wanting to communicatewith a customer and a customer trying to identify real organizationaccounts.

Additionally, Celent said, interacting through social networksis a written form of communication and is subject to legislationand regulation.

In the U.S., Celent said many insurers are testing the socialnetworking waters. Nine of the top 10 nonlife U.S. insurers have atleast one Twitter account, and eight have at least one Facebookpage, according to the report.

In the United Kingdom, however, only seven of the top 20 lifeand nonlife insurers have a presence on Twitter, with fewer onFacebook.