Some insurance executives still question whether social media represents a threat, an opportunity, or just another discretionary communications strategy. At the Insurance Marketing & Communications Association annual meeting in Toronto last week, Sam Friedman of Deloitte listed the six major threats/challenges facing the insurance industry. Social media plays a role in all of them.
- Struggling Economy: Every insurer is trying to find ways to cut costs and increase sales. Traditional mass advertising can be costly so savvy insurers are using lower-cost social media tactics to reach new markets and strengthen old ones.
- Regulatory Reform: State regulators are starting to focus on not just how insurers are communicating but also how they are mining and using social media data.
- Virtual Consumer: Social media is an indispensable bridge to those consumers who rely primarily on technology to obtain goods and services.
- Carrier-Producer Relations: Insurers are rapidly discovering the necessity and benefit of empowering and supporting their agents on the productive use of social media.
- Data/ERM Demands: Insurers’ appetite for reliable data is seemingly insatiable and social media delivers a treasure trove.
- Tech as a Game-Changer: Smartphone commerce and communications is a wave that is a becoming a tsunami that will overwhelm insurers which do not embrace it in all its forms, including social media.
The principal take-away: Insurers who believe they can wait or take half-measures until the economy improves or when policyholders and prospects demand social media engagement make a serious miscalculation. The soft market, lean marketing budgets, growing data needs, aging producer population, and tectonic tech shifts demand a new marketing paradigm. Younger insurance buyers won’t demand social media engagement from any carrier — they will just move to one that does. A portion of older, less tech-savvy buyers may be content for now with not using social media — but a growing percentage will also be lured away by competitors which demonstrate how social media delivers more value.
The principal take-away: Insurers who believe they can wait or take half-measures until the economy improves or when policyholders and prospects demand social media engagement make a serious miscalculation.