March 15, 2013

Jackson National Life VP Bonnie Wasgatt turned some heads last month by saying in a panel discussion that "the value in terms of selling" for social media hasn't "warranted a huge investment." A commenter on the article said that those insurers that "continue to struggle with leveraging the value, will only continue to struggle as a provider, and meeting the demands of their customers in a timely manner."

Insurance consultancy Conning would seem to agree. Monitoring social media is one of the action items the company suggests in its list of eight factors affecting life insurance sales.

Under the "technology" header, Conning writes:

While reaching out to consumers via these platforms has its own dangers, not having a presence in the online social media world will not necessarily protect a company as consumers broadcast complaints widely to their network and to the world. Even if companies do not maintain an active social online presence, monitoring the chatter about one's company may be helpful. Consumers have misconceptions and confusion surrounding insurance and annuity products, and social media may be a way to notice those misconceptions as well as to provide a platform for consumer education.

[Why didn't State Farm's Super Bowl blackout tweet go viral like Oreo's?]

Interestingly, Conning doesn't go so far as to recommend an "active social online presence," choosing to focus on listening only. Surely the commenter and other industry observers would disagree, as many life insurers have had success leveraging social media as a sales tool.

Conning also notes the shift to online financial research as an effect of technology on life insurance that carriers can find a way to meet.

The other seven factors listed include:

  • Population Growth and Geographic Differences -- with more Americans moving to the South and West than the Northeast, life insurers must allocate distribution resources accordingly

  • Changing Age Profile -- there are fewer middle-aged consumers than younger or older, so carriers must consider to which age groups they tailor messaging

  • Increasing Diversity -- carriers must be able to reach a multi-ethnic customer base

  • Socioeconomic Changes -- more people are working into traditional "retirement years," potentially indicating the need for different kinds of products

  • Lifestyle Changes -- the percentage of households with children is declining, and babies are being born later in mothers' lives

  • Life Insurance Protection Gap -- Conning estimated how much the U.S. market was underinsured by calculating "the capital that would be needed to replace a portion of the income of the primary householder for the period prior to normal retirement." The number was more than $20 trillion in 2013.

  • Consumer Attitudes -- Ownership of individual life insurance has dropped over the past 50 years, despite many feeling like they need more.
ABOUT THE AUTHOR
Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, ...