Social media began to impact insurers in 2009 as pioneering companies used the networks to promote and protect their brands. Over the next several years, various surveys charted its growing use and sophistication. Here in 2013, social media in insurance has established a solid base in North America.
How solid? A survey conducted by Celent and Locke Lord, LLP discovered that 80 percent of insurers report that they are using social media in their business and that of the remaining 20 percent, nearly half—45 percent—plan to implement social tools within the next year.
A new report, “Social Media Use in North American Insurance,” explores the benefits, barriers, plans, legal considerations, and business results related to social media in insurance. The feedback provides a snapshot of the current status and also an indication of what insurers expect in their "social" future.
"The survey data confirms that social media use in insurance has established a firm foothold in North America," says Mike Fitzgerald, senior analyst with Celent's Insurance Group and author of the report. "We see insurers of all sizes and in most lines of business on social for marketing, customer service, sales and catastrophe response functions."
Most insurers state that they have gained social media benefits primarily in marketing, and a surprisingly large number have identified customer service as a key potential value area, according to Fitzgerald. Legal, regulatory, and compliance issues are the highest ranked barrier, he adds, with regulatory compliance identified as a significant area of uncertainty.
Strategies, goals and execution vary from company to company, according to Fitzgerald. Celent encourages any insurer writing automobile, disability, workers compensation, and/or employer liability lines to evaluate the benefits of social media as a fraud mitigation tool in both underwriting and claims functions.
Also, as insurers build social skills, carriers should evaluate the benefit of leveraging these to extend services to its agency force. Such services can include creation of content, building of sites, and/or training on social media.
Other findings include:
- No one rated their social media technology tools as excellent; the fact that social media technology continues to mature was evidenced by the fact that most indicate that they cannot offer an opinion on the usefulness of these tools.
- The number of companies offering assistance with social media to their agent force is low.
- Over one third of insurers using social state that they have not established a social media strategy; beyond missing a valuable communication opportunity, this can create a risk management issue in the areas of employment law, regulatory compliance, and protection of intellectual property rights.
- Over half of insurers allow employee access to social media sites from their company network based on the specific job functions or in targeted groups of employees. An additional third allow access with no restrictions. This reflects a more liberal approach to social media than has been seen. Celent views this as an example of how increased interaction via social media in society as a whole is influencing the insurance community. Additionally, it may represent a growing confidence by employers in responsible employee use.