Life insurance might be said to be the original networking industry. Ironically, however, life insurers have lagged in adopting social media, despite the transformational potential inherent in this wide-ranging phenomenon.

In less than five years, social networking has become the most popular activity on the Web, helping to satisfy an inherent human need to be “our own person” while belonging to larger groups and communities. Social media also help consumers make sense of the growing amount of information available on the Web. According to Nielsen, consumers trust opinions they read online more than they do other forms of communication; 90 percent of consumers surveyed by Nielsen said they trust recommendations from people they know, while 70 percent said they trust other opinions posted online.

Through social media, consumers also distribute as well as consume information. Every second, consumers effectively broadcast key events as they occur in their lives. Social media allow everyone to create a public persona for themselves through sites such as Facebook, Twitter or LinkedIn – an ability historically reserved only for the elites. Today, social media users leave narrative bits or “narbs” about our opinions, changes in life status, or interests.

By using social media, life insurance agents and brokers have a tremendous opportunity to innovate and re-create their personal brands within the community. Most agents and brokers are in the “crawl” stage of using social media, where they are in the process of creating their Facebook or LinkedIn profiles. As they transition to the “walk” stage, they begin to ask their customers for recommendations, and build their own digital brands, positioning themselves as experts for many of their services. In the “run” stage, they begin converting those recommendations into a major source of referrals, maximizing the power of their social brand.

How might the use of social media help an agent build referrals and business among upscale consumers? Let’s consider the case of John Rex, a fictional agent who has become adept at using social media and other powerful new technologies.

John is an independent producer and a highly successful seller of long term care, annuity and life insurance products. He is technically savvy and uses social media to generate new sales leads – in fact, 45 people on LinkedIn have recommended John as an LTC expert. He often works with Salus, an equally fictional multi-line, multi-channel carrier with an online presence.

Our fictional prospect, Frank Zapata, is 64 years old. He is contemplating retirement and is interested in LTC. When he researches LTC products using Google, the top return is Salus. When Frank clicks on the Salus website, he learns about Salus, but Salus also establishes some context for Frank. Frank is invited via a link to play Salus’ “Life Travels” game, a social media game designed to help people like Frank negotiate the events they encounter in life and help them make better decisions.

As Frank plays the game, he provides context to Salus. He logs on through his Facebook account and voluntarily shares his Facebook profile information, along with additional information such as his birthday, marital status, children and grandchildren. Through the use of analytics, Frank learns, through Life Travels, that “people like him “are able to enjoy the things when wants to do on an $80,000 fixed annuity. When Life Travels asks Frank if he wants to be contacted by an agent, Frank says yes, and supplies his telephone number.

Salus knows a lot about John Rex, as well – especially that he excels in selling Salus LTC and annuity products, and that he comes recommended the online social communities as an expert advisor for people like Frank. Salus puts John in touch with Frank.

John’s iPad sales application tells him why he was selected to call on Frank Zapata. He has Frank’s profile and builds a tailored presentation, using the products that best apply to Frank’s situation. Frank is impressed by the content of the presentation and by the interest that John has shown in his specific circumstances. As they discuss Frank’s case, John uses the iPad application landing page to launch an illustration which appears prefilled with Frank’s information, including the products selected. The sale is made.

As the story of John Rex illustrates, life insurers have an extraordinary opportunity to build innovation – including mobile, analytics, social media, collaboration and digital marketing/gaming – into their distribution strategies. Social media and gaming, in particular, can help insurers build emotional connections with consumers, especially the under-insured Millennial and GenX populations. This offers the possibility of transforming the relationship between insurers and their customers from one in which customers are “sold” products to one in which customers are actively engaged in educating themselves and in collaboration with agents to “buy” products.

Kevin J. Kraft is a managing director responsible for the Distribution and Growth offerings for Accenture’s Life Insurance practice.