Business Development  08/18/2012

Using Social Media In The Insurance Industry

By Chris Hidalgo

As an agent, it has become beneficial to stay up to date with how the world currently works. For many decades, the insurance industry relied on fax machines and handwritten applications to do their business. While those methods are still common nowadays, more and more agencies are switching to social media and the impact has been tremendous.

The two most powerful networking sites are Facebook and Twitter. More than 65 million tweets (the term for user comments, messages or status updates on Twitter) are posted each day. Meanwhile, Facebook has over 500 million members. Both of these sites are used worldwide, reaching from the United States to countries like Estonia.

Younger insurance agents are the most common users of social media. According to the 2012 Insurance Journal Young Agents Survey, 513 young agents were polled. 75.2 percent reported to having a Facebook page, while 28.5 percent have a Twitter page. When using these sites, it is important to remember to provide great, educational content, such as video and links, to help further build your network.

Companies as a whole are reaping the benefits of using social media. A study by Insurance Networking News revealed that about 85 percent of asset management firms and insurers have seen increased brand awareness on social media platforms and a 67 percent increase in engagement with clients and prospects. However, because the insurance industry has not completely embraced this technology, many people finishing school choose a different career path that they feel is more modern.

Attracting the next generation of agents is important, but with the majority of those young individuals using technology every day of their lives, it becomes a challenge to recruit them if they feel that the methods used by insurance companies are outdated. Yet, not everyone is on board. In an article from The Telegraph, a recent survey of 1,000 companies by Business Network International (BNI) found that three-fourths of business owners have misused social-networking sites to sell their products. Small companies, more than others, are still learning how to use them properly.

According to BNI's national director, Charlie Lawson, companies in general are losing sales because they lack knowledge of social media and ultimately decide to give up on using it altogether. For those who do know how to use it, social media has allowed insurance companies and their agents to share industry-related content and engage with their community on a more personal level.

Some insurance agents have taken it upon themselves to post videos on YouTube answering questions that potential customers may have. Ryan Hanley, a 31-year-old agent at The Murray Group Insurance Services, Inc. in Albany, N.Y., had his company post 100 videos on YouTube of frequently asked questions.

As powerful a resource as social media can be, it can also open up the possibility of receiving an errors and omissions (E&O) claim. Agents should remember that posting messages, answering questions and all functions using social media are no different than sitting across the kitchen table like the insurance agent of yesteryear. Content and accuracy are critical!

Incorrect advice, whether in person or online, is one of the more common reasons why E&O claims happen. The standard disclaimers used in your agency's voice mail, email and website should be used on social networking sites as well. Nonetheless, social media is a great tool to use. With more and more technological advances developing in the insurance industry, it is only a matter of time before the vast majority of these companies begin to follow the trend.

Sources:

  • Independent Insurance Agents & Brokers of America
  • Insurance Journal
  • Insurance Networking
  • The Telegraph