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Moody's: Social media use to rise among life, P&C insurers

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More than 8 in 10 insurers plan to ratchet up their use of social media in the year ahead, primarily for brand/company promotion and marketing efforts, according to a new report.

Moody’s Investors Service discloses this finding in an August “Special Comment” on social media applications among both life and P&C insurers. The report polled 66 insurers (42 life and 24 P&C companies) to determine how they’re leveraging, or plan to use, Facebook, LinkedIn, YouTube and other social media platforms in their operations.

Of the companies surveyed, 57 insurers (86 percent) say they will boost their use of social media in the next year. Insurers now using the online platforms are not yet deriving a competitive edge, the report’s authors contend.

“We do not believe insurers currently emphasizing social media have gained a competitive advantage over their peers at this point,” the report states. “However, we do see social media use as a potential future credit positive for innovators and early adopters, since over time their experience will give them an edge in branding and marketing relative to latecomer competitors.”

The report shows that both life and P&C insurers are using social media primarily for brand/company promotion and marketing efforts. Among life insurers, Facebook and Twitter are the most popular platforms for these purposes: about three-quarters of respondents use Twitter and 80 percent use Facebook.

Facebook and Twitter are also the platforms of choice for marketing initiatives, though fewer insurers use them for this purpose (between 50 percent and 60 percent, depending on the platform). YouTube is used by half of the companies; fewer than half cite LinkedIn and other social media sites.

LinkedIn, however, remains the most popular portal among human resources professionals for hiring, employee screening and monitoring. About 8 in 10 life insurers turn to LinkedIn for HR applications.

The use of social media for customer service purposes remains low.

“Although a few companies used Facebook and Twitter for customer service, this was among the least popular uses of social media, along with underwriting/pricing and fraud detection,” the Moody’s report states. “We believe these capabilities are not used as much due to potential regulatory and compliance issues, as well as security issues.

“Although many insurers may not conduct extended customer service through social media, they may post factual information about disasters and how to file claims,” the report adds. “Even if the company does not post the information, it may be available [through] social media sites of insurance agencies.”

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