It's official: the momentum behind social media is changing businesses one at a time and collectively.

Even though the direction is clearly being shaped outside the industry, insurers are paying attention and some are taking bold steps. The action surrounding social media goes well beyond Facebook, YouTube, and Twitter. The ultimate influence on the business of insurance will be profound—and the impact, even today, is extending far beyond branding.

The technologies behind social media hold great promise for use in customer-facing applications and for making improvements inside the insurance organization. These technologies offer new sales and servicing avenues, new methods for cultivating employee professional development, new avenues for building teams, and will provide valuable help in meeting staffing objectives.

The opportunities are vast and involve all parts of an insurance organization: marketing, claims, human resources, IT, customer service, and more. The challenge is to make sure that all of these parts are working in concert around a common goal and presenting an appropriate, effective face to the social world.

A recent SMA study shows that more than 80 percent of insurers are studying and monitoring social media. Nearly 40 percent have one or more initiatives underway, even though they have not yet laid out formal plans. Future plans are predominantly centered on marketing, with many planning applications for distribution that involve the agent and/or go directly to the customer.

The most remarkable news, however, is what is happening in core areas of underwriting, policy, and claims. Twenty-five percent of insurers say that they are planning activities around social media in all of these areas.

Social media has redefined the boundaries of communities that were historically shaped by physical space. The power of new virtual communities extends reach and the opportunity for targeted campaigns and offerings. Communities open the door for messages that deliver useful information, and in catastrophe situations can even prevent loss and help save lives.

Insurance companies understand that they need to be proactive about actively managing their cyberspace image rather than leaving it to their employees, customers, and external activists to create it for them. Social media sites such as LinkedIn, Facebook, and Twitter, and social media tools like wikis, blogs, RSS feeds, and forums help insurance workers find and nurture relationships with other professionals that can help them learn and grow.

Common interests can be as broad as life insurance or as narrow as claims fraud specifically related to soft-tissue claims. Social networks are providing connection between employers and potential employees, opening the door for those wanting to learn more about a potential employer and facilitating interaction with people who work or want to work for a specific company.

Decisions about what are the best ways to leverage the social web are rarely isolated. Rather, they are usually linked to how other organizations communicate and interact to sell and service the business. Insurers are recognizing the need to coordinate their approach and resulting market presence with agents and other key partners. Likewise, the strategy for capitalizing on and reacting to this connected, information-driven culture and working environment cannot be isolated.

Social media considerations should play a significant role in an insurance company's overall business strategy and need to be a key part of the decisions that guide tactical directions and operations. The first steps are to set goals and establish enterprise-wide policies for social media. Insurers need to be aggressive about developing a plan for how social media can work for them and how they can best manage it for their advantage. The key is to get started now, as the world is moving ahead. It is time to get connected!

Special Reports /

Social Media: Changing Business Forever

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