Insurance unlike other industries has no obvious social media silver bullet that instantly fires the imagination and justifies instant investment and activity. For telecommunication and high technology companies, support capacity can be dramatically enhanced by enabling, encouraging and leveraging the skills of customers. Just today, Vista disabled my user profile but did I call Dell or even Microsoft? No, I ‘googled’ the problem and found an extremely helpful person called Michael who had posted the precise solution in a forum called technologyquestions.com.  Thank you Michael and Dell should say thank you too, it saved them a lot of ‘under warranty’ work. Whether this always results in the hoped for results or not, the economic case is compelling enough to proceed, to encourage, and to enable more people like Michael. But what is the killer application for insurance companies? There really is little demand for chat about insurance policies and existing customers cannot easily help fellow customers in the same way as Michael did for me. Despite this, social media is on the agenda of every major insurance company I have spoken to, mostly under the agenda item of “What should we be doing about social media?”

There are examples already in the industry ranging from Allstate’s community forums, the geeko’s growing cult status on YouTube, and the efforts of local agents to use social networking to develop lead generation relationships. Progressive, innovative as always, provides an online traffic gadget in conjunction with Yahoo that can be shared and commented about. Is this social media or the online equivalent of a company umbrella at a golf tournament? One role of social media is to garner appeal with a specific demographic grouping that have something in common that are attractive to the company. This provides the option of ‘fishing where the fish are’. Consumers that download and then post comments about a traffic gadget are presumably drivers (with maybe too much time on their hands?) and Progressive sells auto insurance – good match. But just how do you leap from identifying an audience to selling products – the good old return on investment problem. But then, how is the sponsorship of a sporting or arts event justified? You look to gain trust and appreciation from a group of people you want to engage.

Another key role for social media is to tap into the thoughts, ideas and opinions of the consumer. With social media they, or at least some consumers, conveniently write it down in a way that can be searched, monitored, measured and even allowing a response. In a crude analysis, health insurance has a lot more social media traffic than life and auto insurance but Geico has the most company social media. That might be due in part to the topical nature of health insurance currently and the appeal of the geeko or cavemen. There lies one problem of social media, what can you measure? What you really want is to understand the level of YOUR social media buzz, what they are saying and whether it is positive or negative and subsequently how you can create revenue as a result. This is proving very hard, sentiment, that is positive or negative, is hard to determine automatically and much of the social media is just noise. Recently there was a bump in social media activity involving MetLife, was it a new innovative policy introduction? No, the Metlife blimp was going up and down the Hudson river in New York, presumably heading for the US Masters golf, or so the forum consensus told me.  Sorting through the reams of social media activity, and it is growing very rapidly, can be a huge task especially if you then want to know about competitors as well.

The killer application could be referrals. Consumers do not trust insurance companies despite all of the advertising, philanthropic work and overall good deeds. Despite that, consumers still prefer to buy insurance products from an agent. Social media has created new expanded networks of ‘friends’, people you may never have met but in some way trust.  The retail industry experienced huge increases in conversation rates for products based on those, now ubiquitous, user reviews. Consumers read and trust these reviews more than product marketing material. Would you buy a camera online without reading what Mary-Lou from Iowa has to say? It does seems illogical in some ways but it is a fact. So how does insurance join the club? If you follow someone in Twitter for a month and generally like what they have to say, do you trust them enough to value their recommendation on insurance policies? Does a Facebook wall entry swing the decision for you?  If an insurance company is on Facebook, does it make them friendlier, more trustworthy or simply easier to contact because that’s where I am.

The fact is, the insurance killer application is not known, it may be all or none of these. Sitting back and doing nothing for a year or worst yet, investing a lot of money building something that will take a year teaches you nothing. Social media is here, it must be understood and your first foray into the space may be completely wrong. For many companies the executive blog is the first step, announced with great aplomb only to lose appeal when there are no posts, readers, the executive get bored or worst yet attracts negative posts from disgruntled customers.  Social media cannot be controlled, just understood, if you write a blog, write it quietly for 3 months, understand the effort required, build up content, a methodology, learn how to respond to questions, comments and criticism.  If it does not feel right, move on. Listen to social media, follow it, be an observer, too many people jump in too fast, say too much. Twitter can be a great source of information as well as being a waste of time. Tweeters that provide great links one day, show us their security line at the airport the next, just because you can, doesn’t mean you should. Investigate many avenues but most of all start to build an understanding, it could be a game changer and you want to be ready to step into the game.

If you are working with social media within industry and have actual applications or maybe just hair-brained ideas, post them. I will collect examples so I can build a public knowledge base so you can produce examples internally to help develop the next steps.