Social media is now established as a sustainable media channel, and insurers are beginning to develop programs to respond to the threats and opportunities in this new space. From a defensive standpoint, a company must implement social media monitoring tools and procedures to protect their brand from attack. Solution providers have developed and implemented effective automation for this purpose. Still evolving are the uses of social media in insurance for value creation and offensive benefit. For example, how can an insurer identify and recognize social exchanges concerning positive claims experiences among the millions of postings placed each day? Leading organizations are beginning to build such capabilities. These companies will know more about their customers at a very specific, actionable level by tracking social media posts. They potentially will be in position to know more than their competitors about their competitors' customers as well, giving them the ability to outmaneuver their competition and gain market share.
The task of monitoring the social media space is massive. The sources include personal social media pages, blogs, microblogs, newsgroups, forums and video. A few metrics illustrate the extent of the challenge:
- As of the writing of this report, Facebook reported over 500 million active users with over half of them logging in on any given day, spending over 700 billion minutes on the site each month.
- On March 21, 2011, Twitter celebrated its five-year anniversary with over 200 million users sending over a billion tweets each week.
- On May 17, 2011, YouTube celebrated its six-year anniversary and currently reports over 35 hours of video being uploaded every minute of the day and exceeds 2 billion playbacks per day.
- As of the writing of this report, LinkedIn reported over 101 million users worldwide.
However, effectively executing either defensive or offensive actions is impossible without automation. The extensive volume and management of the data requires specialized systems. A new category of products — social media monitoring tools — has been developed to respond to these needs. As the space is still maturing, leading potential insurance users are asking, "What should we be looking at?" All insurers should watch the opportunities with these tools and adjust their approach as the automation and processes mature.
MICHAEL FITZGERALD is a senior analyst in Celent's insurance practice, a research and consulting firm focused on the application of information technology in the global financial services industry. For the full report, email firstname.lastname@example.org.