Jeremiah Owyang has a post up today about his search for social media programs in the insurance industry. In short, he didn’t find many. It’s an industry that’s well behind the curve of adoption–which isn’t all that surprising for a profession based on risk aversion.
A few months ago, I had a long conversation with the VP of Worldwide Web Marketing for one of the largest insurance/financial businesses in the world. It was enlightening. This gentleman was quite web savvy and very much a proponent of social media. But he was fighting an uphill battle against management for anything innovative. In the end, he boiled their problem with social media down to a legal roadblock.
We can’t get anything like this past legal. Their position is, ‘if we know what people are saying, we’re liable. It’s better not to know.’
That’s right, plausible deniability. I was a little incredulous. I mean, aside from the fact that legal is preventing the HUGE potential for social media to drive marketing/sales objectives in order to create some perceived firewall against liability for knowing what customers might be complaining about, plausable deniability is a tough argument to make in the age of Google. I mean, you can find out at least 70% of what’s being said about you by doing a Google search. Could you really stand up in court and say you didn’t know? Sorry, your honor, my head was buried in the sand.
If I know that you know that I know, shouldn’t we just talk about it?
As a guy trying to push, pull and drag and insurance company firmly onto the Internet, while I cannot deny that the conservative, risk-averse nature of our business causes nervousness about the unfiltered discussions of social media, I offer a much more mundane explanation for our lack of participation in social media: as an industry, we are well behind the adoption curve for anything Internet. Sure, there is esurance, Progressive, and GEICO, but if you dig into their online marketing tactics, they are pretty “traditional” — search, banners, etc. A few have dipped their toes into the MySpaces and SecondLives, but most insurance companies have so much work to do just to get their sites up to par and front-end ancient legacy systems to enable web self-service, investment in more progressive web activities like marketing through social media just ain’t there yet. It’s on the list, but down a little ways. My bet is, however, that you will see an acceleration in the next 12 months or so, as many large carriers have recently and significantly overhauled their sites and rounded out their online service offerings. They are going to need to drive traffic and adoption to get return on these investments, and there is only so much room for banners and most relavant keywords are already bid up to the ceiling of profitability. Carriers will need to get clever as they fight for eyeballs and quotes, and social media should soon become a much more heated insurance industry battlefront.
I have worked in insurance, and (thanks, Chris) have a keen interest in social networking & marketing.
The lawyer makes a point, although I see it as: “We can’t comment without being liable, so therefore we can’t control the discussion. So we don’t want to enable the discussion.”
Which makes me wonder about organic, consumer-driven efforts at social web sites related to insurance. There don’t seem to be many. Is the subject matter too mundane, too confusing, both? People rate doctors online; lawyers not so much. But I haven’t seen online forums rating Insurance agents, for example.
I’m gonna go check if Amazon is selling insurance (I know CostCo is…).
Here are some things that come to mind in the discussion:
Insurance is regulated at the state level, and differs drastically from state to state. This includes programs available, coverages, prices (and how they are determined). Rates even vary by zip code. National insurance companies can handle broad discussion, but they are not equipped at the state level to manage a public discussion….
Well, flood insurance is regulated and underwritten by FEMA…but that’s another story.
Insurance is often purchased through agents and brokers. These are typically traditional, local business people, still relying on classic marketing methods (meetings, phone selling). There is plenty of online lead generation. But regulations place some limits or at least requirements on these methods (e.g. using web sites and email to sell life insurance). Social marketing mechanisms either need to include agents/brokers, or replace them.
The insurance companies themselves have always been opaque. Sometimes it seems the means for discussion in this industry have been advertising in one direction, and politics + lawsuits in the other.
Wow
Insurance is an Industry that thrives on relationships.
Social Media = Mass relationship building and sustainability
License/Designated Ins Professionals are suppose to act in the best interest of the insured. Not wanting to listen to (meet the needs of) your insureds and potential insureds goes against the true nature of the industry.
If carriers, reinsurers, wholesalers, retailers, etc. do not want to act in the best interest of their consumers, then it is only a matter of time before you are out of business.
Build the Relationship = Participate, Listen, Adapt, Repeat.
I stumbled upon this post while desperately trying to find compelling examples of social media uses in the insurance industry.
I thought I’d share my _only_ interesting find so far: Compare the Meerkat: http://mashable.com/2009/04/05/compare-the-meerkat/