Insurers can increase the actual and perceived value of social media use by extending social search tools and processes beyond marketing departments and into the core operations of the organization. That was the finding of research conducted by Celent and released in a report: Realizing the ROI of Social Media in Insurance: Listen to the Mirror.
Companies can realize the ROI potential of social media by applying it broadly across the enterprise, not only as part of their marketing activities, according to the report, which focuses on North American property & casualty insurers.
Celent used a social media search tool to extract consumer postings from social sites that mentioned any one of 14 insurance companies. The report analyzes over 380,000 social posts at both macro and micro levels.
At the individual posting level, opportunities are identified to improve insurer performance in the functional areas of claims, customer service, and product management, according to Mike Fitzgerald, a senior analyst with Celent and co-author of the report.
"Insurers are encouraged to consider how this analysis could improve their understanding of what is important to their customers and agents," says Fitzgerald. "The results will be especially valuable for companies which concentrate on the consumer and/or small commercial segments and which value customer intimacy as a fundamental strategy."
"Social data is a good source of insights, prompts, and provocations, but using it blindly as an empirical source of the truth may be pushing it too far," says Craig Beattie, senior analyst with Celent and the other coauthor. "As with any new data source, the insurance industry must do its due diligence and respond wisely. Insurers will get the most value from analyzing this content by committing time to it and learning what works and doesn't in sifting through data."
Key findings of the report include:
- A recurring finding from Celent research concerning the use of social media in insurance is the perception that the return on investment is low or nonexistent. Given that the cost of social platforms is minimal, this implies that the benefits associated with it are thought to be very low.
- By analyzing social data all the way down to the source level, Celent's research discovered opportunities to improve insurer performance in specific functional areas. This report focuses on the functions of service, product management, and claims. It details examples of social posts that are a useful source of input and opportunity in the following areas.
- However, this new source of information is not a silver bullet for insurance operations improvement. There is a great deal of unhelpful, low value material that must be weeded out by clever, thoughtful search logic. Retrieving truly useful information requires effort and skill. Additionally, in order to leverage these sources fully, insurers must insert them into current, existing processes, adjust traditional business methods, and build new ones. It is not enough to listen externally using social search tools to identify issues; improvement also requires process change.
- Insurers are encouraged to consider how this analysis could improve their understanding of what is important to their customers and agents. The results will be especially valuable for companies which concentrate on the consumer and/or small commercial segments and which have customer intimacy as a fundamental strategy.