Posted on 21 Apr 10
In a new report, “Leveraging Social Networks”, Celent, a research and consulting firm, focused on the application of information technology in the global financial services industry, reviews the current usage of social networks by insurers and looks at the broader social networking trends that will drive innovation in insurance in the future.
Many insurers are already testing the waters in the world of social networks, and best practices are only beginning to emerge. Adoption is much higher for insurers in the United States when compared to the UK, where interaction is rare and adoption is just starting. The firm’s report asserts that there are three principle reasons for participating in social networks:
1. They are a cheap method of advertising. Most social networking sites offer their services for free, for now. The business model is centered on allowing third parties to pay for targeted advertising to customers of the social networking websites, and this is why they are so relevant to digital marketing and insurers.
2. They are growing as a communication channel to customers. A study by Anderson Analytics on the demographics of social networkers and non-users in July 2009 found that the average user logs on five days a week, four times a day, for a total of about an hour a day. Unlike e-mail, Celent says, social media is a multimedia experience with video, images, audio and text content all expected. And, unlike other channels, interactions through social networks are expected to be more human, rather than with a corporate entity.
3. They are increasing in influence. Exprian Hitwise reported that Facebook was the most-visited website in the U.S. for the week ending March 13, 2010, having more visits than Google for the first time. Celent points out that this is important because to utilize the vast majority of content on Facebook, you must be a Facebook user. Celent contends social networks will grow to define most people’s experience of the Internet in the future. Much more of the media that people are exposed to, including advertisements, will be tailored based on their social networks. Even comments and reviews will be prioritized so that friends’ reviews appear first.
Spending effort now in seemingly frivolous activities on social networks can drive real business value, according to Celent. The huge popularity of comic mascots in social media has paid dividends to insurers who have invested in them and executed them well.
In the United States, nine of the top 10 non-life insurers have at least one Twitter account, and eight of those have at least one Facebook page. Of ten leading U.S. insurers, Nationwide has the most Facebook fans, while State Farm and Allstate and have the most Twitter followers. Celent attributes Nationwide’s success to its comedy character at the heart of an advertising campaign, “World’s Greatest Spokesperson in the World” campaign. The model uses amusing social media content on social networks along with other advertising media.