The process of integrating social media in insurance and its moving parts continues with anew report examining both hurdles and opportunities specific to theNorth American property and casualty (P&C) insurance industry.Basing its findings on 3Q 2011 interviews with 15 P&C industryexecutives, Aite Group makes a convincing case that althoughsome are successful, many P&C insurers are not fullysocial media savvy…yet.

“Dramatic and rapidconsumer adoption of social media, fueled by the uptake ofmobile communication and computing devices, and further spurred bymost other global consumer industries, has presented the P&Cinsurance industry with a variety of challenges and opportunities,”says Stephen Applebaum, senior analyst at Aite Group and author ofthe report. “Further magnifying the enormity of these implicationsis the fact that social media, unlike most of the disruptivetechnologies that preceded it, has impact and utility across theentire P&C insurance enterprise and the broader insurerecosystem.”

Underwriting, claims, and marketing are specific areas forapplication. Applebaum also specifically names one bracket thatcould use some new friends and followers: the agent and brokerside.

“They seem to be having the greatest difficulty among allparties in the P&C insurance industry in embracing andleveraging social media opportunities externally, particularly withregard to their all-important customer relationships andprospecting.”

Today's hurdles are undoubtedly the result of consumerdisengagement from the traditional agency-distribution model. Inthe report, Aite asserts that carriers can no longer rely solely onagents to pinpoint the product needs and expectations of currentcustomers and prospective ones. Another area where social media isvastly underutilized is claims, where “revolutionize claimshandling.”

Conversely, social media is making the jobs of thoseinvestigating claims somewhat easier. More people are willing toserve up details about their daily activities for publicconsumption, often inadvertently revealing discrepancies in theirstories, especially when that pertains to injuries for which theover-sharers collect workers' compensation benefits.

Nevertheless, the marketing paradigm on which companies haverelied for years is of diminishing efficacy. Insurers realize thatnow friends and veritable strangers are able to sway the averageperson more easily than agents, traditional marketing, and adslogans.

“It is said that insurance is at its core a relationshipbusiness,” Applebaum explains. “Since social media hassignificantly changed the nature of business-to-consumer andinterpersonal relationships, it is fair to say that it hastherefore fundamentally altered the P&C insurance business. Asan increasing number of people use their computers and mobiledevices to connect with friends, post their opinions, and engage inconversations, it is vital that thought leaders who deal with thisnew breed of consumer understand this phenomenon and prepare theirorganizations to thrive in a new world order in which customerswield more power and influence over businesses than ever before.”

Applebaum reports that “nearly two-thirds of internet-usingadults also use social networking sites,” and that virtually allMillennials use social media, thus representing a large anduntapped market for the industry.

Define and Defend Your Brand

He adds that even greater value can be realized if insurerssocial network more strategically, to provide the public withadvice and information not only in the wake of natural disasters,but also to ensure they are fully informed and prepared ahead ofsuch 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 criticalin myriad ways; connecting with customers in new and fundamentallydifferent ways; building, defining, and defending a brand; andgathering vast amounts of distinct, valuable and granular customerinformation available in no other way.”

The 20-page report is available for purchase on the company's website.