The process of integrating social media in insurance and its moving parts continues with a new report examining both hurdles and opportunities specific to the North American property and casualty (P&C) insurance industry. Basing its findings on 3Q 2011 interviews with 15 P&C industry executives, Aite Group makes a convincing case that although some are successful, many P&C insurers are not fully social media savvy...yet.
“Dramatic and rapid consumer adoption of social media, fueled by the uptake of mobile communication and computing devices, and further spurred by most other global consumer industries, has presented the P&C insurance industry with a variety of challenges and opportunities,” says Stephen Applebaum, senior analyst at Aite Group and author of the report. “Further magnifying the enormity of these implications is the fact that social media, unlike most of the disruptive technologies that preceded it, has impact and utility across the entire P&C insurance enterprise and the broader insurer ecosystem.”
Underwriting, claims, and marketing are specific areas for application. Applebaum also specifically names one bracket that could use some new friends and followers: the agent and broker side.
“They seem to be having the greatest difficulty among all parties in the P&C insurance industry in embracing and leveraging social media opportunities externally, particularly with regard to their all-important customer relationships and prospecting."
Today’s hurdles are undoubtedly the result of consumer disengagement from the traditional agency-distribution model. In the report, Aite asserts that carriers can no longer rely solely on agents to pinpoint the product needs and expectations of current customers and prospective ones. Another area where social media is vastly underutilized is claims, where “revolutionize claims handling.”
Conversely, social media is making the jobs of those investigating claims somewhat easier. More people are willing to serve up details about their daily activities for public consumption, often inadvertently revealing discrepancies in their stories, especially when that pertains to injuries for which the over-sharers collect workers’ compensation benefits.
Nevertheless, the marketing paradigm on which companies have relied for years is of diminishing efficacy. Insurers realize that now friends and veritable strangers are able to sway the average person more easily than agents, traditional marketing, and ad slogans.
“It is said that insurance is at its core a relationship business,” Applebaum explains. “Since social media has significantly changed the nature of business-to-consumer and interpersonal relationships, it is fair to say that it has therefore fundamentally altered the P&C insurance business. As an increasing number of people use their computers and mobile devices to connect with friends, post their opinions, and engage in conversations, it is vital that thought leaders who deal with this new breed of consumer understand this phenomenon and prepare their organizations to thrive in a new world order in which customers wield more power and influence over businesses than ever before.”
Applebaum reports that “nearly two-thirds of internet-using adults also use social networking sites,” and that virtually all Millennials use social media, thus representing a large and untapped market for the industry.
Define and Defend Your Brand
He adds that even greater value can be realized if insurers social network more strategically, to provide the public with advice and information not only in the wake of natural disasters, but also to ensure they are fully informed and prepared ahead of such events.
“P&C insurers can no longer afford to ignore social media,” Applebaum concludes. “It is a permanent, transformative, and ever- evolving reality. Understanding and mastering it will be critical in myriad ways; connecting with customers in new and fundamentally different ways; building, defining, and defending a brand; and gathering vast amounts of distinct, valuable and granular customer information available in no other way."
The 20-page report is available for purchase on the company’s website.