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Social Media's Dangers and 7 Other Factors That Can Impact Life Insurance Sales

Insurance consultancy Conning says that life insurers must be cognizant of the chatter around them in the social arena, as well as present in the ever-growing channel, to grow their businesses.

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.

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, distribution, core systems, customer interaction, and risk ... View Full Bio

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User Rank: Apprentice
4/30/2013 | 4:32:04 PM
re: Social Media's Dangers and 7 Other Factors That Can Impact Life Insurance Sales
The social media activity to date has suffered from a lack of authenticity. Too much focus on false metrics such as likes/fans and followers but that is what agencies and marketers know. We are stuck playing the Facebook "manage the Edgerank" game but we will mature into trying to connect with people that do want to connect with us and not because we post pictures of cute puppies. This false start has many thinking that social has failed to produce and to an extent it has failed. It is as Anthony says the technology of engagement but we need authentic engagement.
User Rank: Apprentice
3/20/2013 | 1:40:36 PM
re: Social Media's Dangers and 7 Other Factors That Can Impact Life Insurance Sales
I couldn't agree more. It's all about meeting consumers where they want to be met. Today, we have this whole middle tier that is not being served. Gen-X and Gen-Y are expecting to carriers to meet them in their preferred channels. Life Insurance carriers are struggling with how to do connect, through what channels and how to do it cost effectively.

I have the privlege of working for a big company that deals with all the top tiers life carriers. We are seeing many of them really be proactive in their Digital and Social Media efforts.

You hear so much talk about Gen-X, Gen-Y. Some carriers are really starting to catch on that this is their future market. These groups will go through more life changing events than any other group. They will be the groups to buy and are continously looking for new distribution channels. Their time is limited. Face to Face interaction with the local agent is becoming a thing of the past for many of these individuals. They want lots of information, fast and be able to make quick decisions. Many of them are use to technology and little interaction.

The winners will be those that can connect effectively with these groups, understand through data when they are experiencing life change events and deliver a personalized and relevant experience, through their channels of preference. Gerber Life and State Farm are doing a great job here.

We need to also be able to identify who your influencers are in Social Media and reward them accordingly. If you are looking for a way to reach masses of people inexpensively, let positive experiences take over. Ask if they had a great experience after their purchase and reward them if they post a positive message on your behalf. You will watch your CPA's drop quickly. People listen to those they know, versus a company.

The other winners will be those that figure out how best and how cost effectively to serve the underserved mid-market group. You are starting to see shorter applications, on-line applications, and new products pop-up. Many of the larger carriers are having to deal with legacy systems, which gives newcomers an advantage. The key again with this group is to connect, when you know they have experienced life change events. This is something that I know all too well. Many are doing it. If you are not, give me a call.

I recently put together a Social Media chart on who is doing what in the Life space. A year ago, that chart was very empty. Today, the chart looks very different. Company's like Gerber Life and State Farm have done a great job figuring out how to connect with GenX and GenY.

The last group of winners will be those that connect and build relationships through the entire customer lifecycle and not just at the point of acquistion. Customers need to know that you know them and are looking out for their best interest. Know when to reach out, how to build a relationship, understand when something changes and be ready.

If you can do all three of these things and do it cost effectively, you will WIN!
Anthony R. O'Donnell
Anthony R. O'Donnell,
User Rank: Apprentice
3/19/2013 | 1:25:52 PM
re: Social Media's Dangers and 7 Other Factors That Can Impact Life Insurance Sales
Perhaps Bonnie Wasgatt and the commenter could both be right. The returns on social media may not yet justify a "huge investment," but that doesn't mean that they won't, or that a more modest investment may suffice to reap the benefits of social media.

I do agree with the commenter that social media is essential for data mining and other uses. For example, social media is a "technology of engagement," and indeed the circumstances of engagement in the world are increasingly mediated by technology, which is largely to say by social media. You have to meet the customer where she is, and social media is such a locus.
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