It may be the single fact that everyone today can agree on–social media is continuing to gain momentum, and there is plenty of tangible evidence of its impact all around us.

Social networking tools are powerful influencers because of their incredible reach. These tools are shaping our world and changing behaviors as communities of interest are formed around common issues and topics.

Social media provides new methods for harnessing information in ways that influence the gathering and use of information for both business and personal needs.

For insurance organizations, understanding and capitalizing on social media is not an option–it's an imperative.

Standards and expectations for interaction with customers are being set outside the industry. The image and brand of insurance organizations are being shaped, either intentionally or accidentally, by an explosion in the use of social media platforms and tools and the number of people that are engaged.

While the complexity and dynamics can sometimes be daunting, this is not the time to wait and watch. There are real business benefits–far beyond branding and marketing opportunities.

These technologies hold great promise for use in customer-facing applications as well as making improvements internal to the enterprise. They provide new sales and servicing avenues, new methods for cultivating professional development, new avenues for building teams, and valuable help for meeting staffing objectives.

Social media is both a business and technology issue, and as such, should become an essential part of the business strategy and an integral part of the IT roadmap.

Understanding the expansive universe of social media can be daunting even for the most technology-savvy organizations. Social media is a “living” medium and is constantly changing. It is a formidable challenge to keep track of continually changing developments.

It is easier to understand the scope by grouping the many activities and websites that comprise today's social media world into a few major categories. (See the accompanying graphic on “The Social Media Universe.”)

The potential business value for the insurance industry is moving beyond just sales and branding to a stage where servicing benefits are equally important.

The marketing and distribution departments are mining insight from virtual communications, working to enhance and protect the brand, and capitalizing on the new channel opportunities. Customer service is able to reach a large segment of the client base quickly with critical information.

The power of new virtual communities is continuing to extend their reach, even in shaping groups that could form new risk retention pools that insurers might want to target with offerings and campaigns.

At the same time, social media platforms and tools are being used to help people work together more productively inside the organization, to help insurance professionals learn and grow through collaboration with other experts outside the organization, to better manage risk and loss, and to better service the customer.

Let's consider some of the areas where social media is becoming a major factor in the insurance industry.

o Customer Service:

Some insurers are finding that social media tools and platforms are helping them reach not only their own customers, but many potential customers with alerts regarding hurricane preparation, flash-flood warnings, tornado threats, road hazard updates, traffic alerts, and on and on.

Important messages and information can be broadcast in general media or posted for access by interested parties.

o Professional Development:

Social media sites such as LinkedIn, Facebook and Twitter, as well as social media tools such as wikis, blogs, RSS feeds, and forums, enable users to find and cultivate relationships with other professionals who help them learn and grow.

Online communities by nature consist of a group of individuals with common interests. In the insurance world, those common interests may be related to specific insurance lines or functional areas of the business. Communities may be as broad as life insurance or as narrow as claims fraud for soft-tissue claims.

On LinkedIn, where professionals often meet, there are currently over 3,400 insurance professional groups. Most of these are organic, self-forming communities of interest for areas such as claims, underwriting, agent/brokers, and risk management. They are driven by the participants. Users exchange insight and learn, and through their shared experience are changing the way business is done.

Online collaborating ranges from specific areas, such as insurance expert witness groups focused on resources and topics for insurance professionals who provide advice, counsel, opinions and testimony in insurance litigation, to general areas, such as risk surveying and claims handling.

Some of this collaborating is yielding immediate, highly usable information and guidance–the kind that just a few years ago was only possible with attendance at annual industry meetings and lots of phone time, reading and research.

o Collaboration:

By using private, company-sponsored wikis and forums, employees and agents from various departments and locations are able to interface with each other and trusted third parties to better manage business situations and needs.

Disaster management teams can interact immediately with first-responders, adjusters, repair service providers and special needs organizations to manage loss and optimize delivery on the promise of the insurance contract.

Internal experts can collaboratively work with trusted advisors and partners on safety engineering.

o Social Media Offers Real Business Value:

It is undeniable that the use of social media is exploding. Yes, the insurance industry should be paying close attention and, in most cases, taking planned actions.

Social media offers real business value to all involved in the insurance value chain–insurers, agents and brokers, their partners, and customers.

It is important for all insurance organizations to advance their understanding, lay out a strategy and accompanying goals for their organization, and define social media policies that apply across the enterprise.

Social media is not a fad. It is simply the next important stage in the evolution of interaction–one that is enabled by the explosion of advances in information and communication technologies.

Karen Furtado is a partner at Boston-based SMA Strategy Meets Action, a strategic advisory firm offering research, advice and consulting exclusively to the insurance industry. She may be reached at kfurtado@strategymeetsaction.com.

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