The insurance industry worldwide is undergoing a significant change accelerated by the financial meltdown and changing demographics of its customer base. In this blog, we will discuss the challenges, approaches and possible solutions to dealing with the transformation that the industry has unwittingly entered into.

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September 25, 2010

Social Media for Life Carriers - a fad or a disruptive force

A lot has been written and discussed about social media potentially transforming the way Insurance carriers conduct their business with the consumer of tomorrow. And why shouldn't it be? After all, Facebook, LinkedIn, Twitter memberships have crossed 800 million, use of social networking among all age groups is growing exponentially and there's no indication that this juggernaut will stop anytime soon. No doubt the Gen X and Gen Y consumers of tomorrow have social media engrained as an integral part of their daily lives. And social media, if leveraged the right way, does complement and benefit the entire value chain of marketing, sales, servicing and even product design and innovation for all carriers.

However, with all the buzz around social media being a disruptive force and a game changer, widespread adoption has been rather anemic among all Insurance carriers, more so among Life carriers than P&C carriers. Surveys indicate that while all large and medium carriers are spending more and dabbling in the social media world and that their marketing and sales budgets have experimentation with social media at the top of their agenda, still they have kept their budgets and plans unchanged for traditional channels of marketing, distribution and servicing. And are cautiously optimistic about social media providing them business benefits large enough to reduce spending in traditional channels.What could be the drivers and reasons behind this? Is social media too new and unproven in the Insurance world?

One reason for limited adoption can be attributed to Insurance carrier's low risk appetite and traditionally conservative approach to new business practices and technologies.Or is the worry more around reliability and credibility of information and how and what to use it for? Are carriers concerned about the compliance and regulatory aspects of using information found in the social media world? OR Is the traditionally value conscious Insurance industry really not convinced about the ROI they can achieve with social media?

My subsequent blogs will attempt to explore the opportunities and challenges related to widespread adoption of social media among Insurance carriers around:

• Usage, Reliability and Credibility of information found in the social world

• Compliance, Regulations and Privacy aspects of social media tools

• Measuring value and ROI from investment in social media tools

 

What do you think? I would love to hear your views and perspective. 

 

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