Realizing the ROI of Social Media in Insurance
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14 February 2013Michael Fitzgerald
A recurring finding from Celent research concerning the use of social media in insurance is the perception that the return on investment is low or nonexistent. Given that the cost of social platforms is minimal, this implies that the benefits associated with it are thought to be very low. Celent believes that insurers can increase the actual and perceived value of social media use by extending social search tools and processes beyond marketing departments and into the core operations of their organizations. Companies can realize the ROI potential of social media by applying it broadly across the enterprise, not only as part of Marketing activities. In order to test this theory, newly published research uses a search tool, Salesforce.com Marketing Cloud, to extract 380,000 consumer posts from social sites that mention any one of 14 North American P&C insurance companies. (report url = http://www.celent.com/reports/realizing-roi-social-media-insurance-listen-mirror)This creates a mirror, held up to insurers, so that they may see what their agents, customers and prospects are saying about them. This is not study of what insurance companies want us to know… their latest contest, advertisement, or antics of their beloved mascots, but, rather, what paying customers say is important to them. It is a massive, virtual insurance consumer focus group. By analyzing social data all the way down to the source level, Celent’s research discovered opportunities to improve insurer performance in specific functional areas. The report focuses on the functions of Service, Product Management and Claims. If found numerous and diverse examples of how these areas can be improved using the output from social listening. Examples include: providing examples of best practice for catastrophe response audits (based on recent Sandy postings), identifying cases of poor communication and planning in property risk management, and detailing interactions between customers and agents that customers said were valuable and increased the benefits of an agent relationship. However, social listening is not a silver bullet which will create customer value in and of itself. In order to maximize value from social search, insurers must perform the difficult tasks of changing work processes and driving decision-making to customer contact points. Traditional assumptions about what insurance consumers (both individuals and businesses) value must be challenged. Product experiments should be undertaken based on what is heard. Making these adjustments is a leadership, not just a technology play. This research details specific examples of actionable social content and makes suggestions of how these can be used to improve insurance operations. Social data is a good source of insights, prompts and provocations, but using it blindly as an empirical source of the truth is pushing it too far. As with any new data source, the insurance industry must conduct its due diligence and respond wisely. Once insights are validated and meaningful responses are put in place, the return on investment in social tools will be realized.
Asia-Pacific, EMEA, LATAM, North America