NU Online News Service , Aug. 31, 3:35 p.m. EDT
Insurers still marketing with telephone calls, conferences, e-mail and live meetings may be missing an opportunity for growth if they ignore social media, according to an industry expert.
In an article co-authored by Howard Mills, director and chief advisor of Deloitte's Insurance Industry Group and former New York insurance superintendent, and Arun Prasad, senior manager, Deloitte Consulting, Mr. Mills said social networking is not only becoming the norm in consumer lifestyles, but it is now impacting insurance buying decisions, especially among younger generations.
Once used almost solely by generations X and Y, use of social media has become widespread, as baby boomers become more familiar with new technologies that allow participation through informal interactions, Mr. Mills said.
He noted that many insurers are concerned about their return on investment with social media. He said the top areas where companies can realize significant benefits from adopting social media include:
o Generating long-term revenue growth: Industries such as telecom and retail have embraced these capabilities, and customer expectations are quickly growing into all sectors of financial services.
o Attracting and retaining top talent: Top agent talent in the industry recognizes the need to engage with their clients using these new tools and is rapidly adopting them. Insurers that provide access, guidelines and compliance clearance for social media tools will attract the top agent talent and make their agents more efficient.
o Optimizing marketing spend and effectiveness: Insurers can utilize social media to gather information about their customers and conduct targeted marketing campaigns to the right customer segments.
Conversely, Mr. Mills said, the top time-sensitive risks to ignoring social media include:
o Branding risk: Ignoring customer conversations on social media can represent significant risks to a company's brand.
o Compliance risk: Regulations have not evolved as fast as social media, and insurers are likely at risk without knowing how social media is being used.
o Risk of falling behind the competition: Doing nothing may result in customer loss and talent drain.
Mr. Mills pointed out that the growing use of social media for business use has placed companies where they were around 2000, when the issue was to control instant messaging and e-mail traffic. With no other way to control the interchanges, he said, some firms went so far as to ban their use.
This practice ended, however, as e-mail applications and software emerged that allowed companies to monitor and keep records of the communications, he said.
Insurers are turning to a growing number of social media software packages and services that allow for greater control and capture of social networking traffic.
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