Archives for October 2009
There is a lot of buzz about the use of social media, but most companies are only beginning to look at how to make it work in insurance. The experimentation continues, but I had not heard of an approach which blends this new opportunity with the realities of our industry — until today.
Almost all of the discussions concerning using these tools involve going direct to the consumer. For example, it is common to hear the suggestion that a company set up a Facebook page where insureds can sign up as “fans”. However, the majority of insurance sold in the U.S. is done so through an intermediary, usually an independent agent. How can an insurance company best leverage social media given the distribution realities of the marketplace?
One way is through providing services to agents which have affinity marketing schemes already in place. These services would include education to the agent (what is social media and why should I care?), strategy planning with them (where should my agency establish presences – Facebook? Linked In?), and implementation assistance (how do I get started and how does my agency use it on an ongoing basis to drive business?).
As an example, consider an agency which has a program which sells personal insurance products to teachers. An insurance carrier can add value to their agency force and create goodwill with this agency by providing some advice and direction to the distributor about where best to find teachers on the web, what tools will best reach them, and how to follow up with postings that will be made.
Most insurers already have the infrastructure in place to manage agents with affinity relationships, so this service can be an addition to that, not a new department that requires significant investment. Some cross functional knowledge transfer between IT and Marketing can establish a skill base which agents will find most valuable.
In these days where revenue is shrinking and funding is constrained, an innovative approach that is low cost and leverages existing relationship is a winner.
SNL reported today on two benchmarks for Property and Casualty pricing in 2010. The bottom line is that revenue support is not going to come from a hardening market. At best, prices may stay flat.
According to SNL, a MarketScout report forecast flat to slightly higher prices, while a Willis study concluded that price increases would be difficult to come by.
All of this points to the importance of keeping business that is currently on the books and looking for ways to earn business from other carriers. As noted in other blog postings, the change in this approach in this economic environment is that growth will come from service, distribution channel management, and acquisitions. New market and/or innovative product initiatives will not be the engines that they have been in the past.
For systems professionals, this means lowering expenses and raising quality on what is already being done and selectively investing in projects with shorter timelines that have direct revenue impact.