Insurers can increase the actual and perceived value of socialmedia use by extending social search tools and processes beyondmarketing departments and into the core operations of theorganization. That was the finding of research conducted by Celentand released in a report: Realizing the ROI of Social Media inInsurance: Listen to the Mirror.

Companies can realize the ROI potential of social media byapplying it broadly across the enterprise, not only as part oftheir marketing activities, according to the report, which focuseson North American property & casualty insurers.

Celent used a social media search tool to extract consumerpostings from social sites that mentioned any one of 14 insurancecompanies. The report analyzes over 380,000 social posts at bothmacro and micro levels.

At the individual posting level, opportunities are identified toimprove insurer performance in the functional areas of claims,customer service, and product management, according to MikeFitzgerald, a senior analyst with Celent and co-author of thereport.

“Insurers are encouraged to consider how this analysis couldimprove their understanding of what is important to their customersand agents,” says Fitzgerald. “The results will be especiallyvaluable for companies which concentrate on the consumer and/orsmall commercial segments and which value customer intimacy as afundamental strategy.”

“Social data is a good source of insights, prompts, andprovocations, but using it blindly as an empirical source of thetruth may be pushing it too far,” says Craig Beattie, senioranalyst with Celent and the other coauthor. “As with any new datasource, the insurance industry must do its due diligence andrespond wisely. Insurers will get the most value from analyzingthis content by committing time to it and learning what works anddoesn't in sifting through data.”

Key findings of the report include:

• A recurring finding from Celent research concerning the use ofsocial media in insurance is the perception that the return oninvestment is low or nonexistent. Given that the cost of socialplatforms is minimal, this implies that the benefits associatedwith 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 insurerperformance in specific functional areas. This report focuses onthe functions of service, product management, and claims. Itdetails examples of social posts that are a useful source of inputand opportunity in the following areas.

• However, this new source of information is not a silver bulletfor insurance operations improvement. There is a great deal ofunhelpful, low value material that must be weeded out by clever,thoughtful search logic. Retrieving truly useful informationrequires effort and skill. Additionally, in order to leverage thesesources fully, insurers must insert them into current, existingprocesses, adjust traditional business methods, and build new ones.It is not enough to listen externally using social search tools toidentify issues; improvement also requires process change.
• Insurers are encouraged to consider how this analysis couldimprove their understanding of what is important to their customersand agents. The results will be especially valuable for companieswhich concentrate on the consumer and/or small commercial segmentsand which have customer intimacy as a fundamental strategy.