May 20

Telematics/Usage-Based Insurance: Where Do Canadian Brokers Fit?

By Insurance-Canada.ca BlogEditor1 Comment

Since Desjardins’ May 13th launch  of Ajusto – a Telematics enabled Usage Based Insurance (UBI) product – there have been active discussions about how independent brokers in Canada could fit in as distributors of this type of product.  We think that brokers have a unique opportunity to define the future for themselves and their customers if they can look at the big picture.  We’d really like your thoughts on this.

How Brokers Think About Their Role …

A recent discussion on the LinkedIn Canadian Insurance Broker Strategy Group offered the following comments from brokers:

  • “The next generation telematics has the ability to be a game changer… we (brokers) run the risk of falling behind times to our detriment.”
  • “I really have to wonder whether telematics will prove useful over the long term or become a passing fad. What happened to the Aviva trial?”
  • Telematics won’t change driving behaviour overall, and some drivers will be penalized to enable others to get discounts.
  • “Are or should Brokers have the ability to view the Telemnatics data”
  • “How does Telematics fit into the rating regulations in many provinces? Don’t all these discounts have to filed and worked into a rating scheme, or do they hybrid it with the existing class/dr system?”

We believe that virtually all of these comments (except for the first) miss the big picture.

What’s The Big Picture?

Here’s the big picture from our perspective: Given this is a new and rapidly evolving environment, brokers can fit in wherever they want if (and this is a big if) they can get together with enough critical mass to define the future.

Consider:

  • Canada is just restarting its implementations.  At present, the insurers are direct writers.  However, one doesn’t have to go far to find broker companies in serious discussions about starting.
  • In the US, the acknowledged leader in UBI implementation is Progressive, which distributes through independents and directly.  In reality, it has a penetration of less than 20% of its potential auto base.  Direct writers and Agency companies are coming on quickly.
  • In the UK (a more mature market for UBI),  IT supplier SSP has partnered with Wunelli, a leader in telematics technology to offer a “mass market” UBI programme for independents.

Our belief is that the pioneers are defining the future of UBI on a regional basis.  In Canada, brokers are still major players and, if some or all of them can come together in partnership with some leading insurers, they could define a future which meets the needs of the brokers and their customers.

This will require some education, some time, and some creativity.  But, if UBI is the way of the future for a significant portion of the marketplace (and we believe it is),  this is an investment in protecting current market share and potentially expanding.

The alternative is to wait for others to define the role of the broker on their own.

What Do You Think?

Is UBI a future direction in Canada?  If so, should brokers have a role? And, if so, do brokers have the interest and energy to create the future?

Broker-Carrier Relationships, Telematics
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May 17

Can IT Be Aligned with Turbulence?

By Insurance-Canada.ca BlogEditorNo Comments

Within the IT management community, “alignment” has been a hot topic for some time.  If, as some suggest, the insurance industry is on the edge of some fundamental, possibly existential challenges, the question might be, “align with what?”

What is ‘Alignment’, Anyway?

A frequently cited review of literature by Chan and Reich, ‘IT Alignment: What Have We Learned’, notes that there have been three major themes developed in studies on IT/Business alignment:

  1. linking the business plan and the IT plan,
  2. ensuring congruence between the business strategy and the IT strategy, and
  3. examining the fit between business needs and information system priorities

The authors note that case studies have found that alignment produces results: “the findings support the hypothesis that those organizations that successfully align their business strategy with their IT strategy will outperform those that do not. Alignment leads to more focused and strategic use of IT which, in turn, leads to increased performance.”

So, alignment is a desired state, right?  Perhaps, or it might be more situational.

Can You Align with Turbulent?

According to the Chan and Reich, “Tightly coupled arrangements can have negative outcomes especially in turbulent times. That is, if the business environment suddenly changes and alignment is too tight, businesses may have difficulty adjusting to their new environments.”

If you find yourself saying, “That sounds like the insurance industry these days,” you are agreeing with several leading insurance-technology thinkers.  At the Analysts Panel during the recent ACORDLOMA Forum, Kimberly Harris-Ferrante, VP and Distinguished Analyst at Gartner said that CIOs are becoming keenly aware of all the pressures in the industry, and are seeing the need to adapt.  Insurance Networking News quoted Harris-Ferrante saying that Insurance technology leaders “are becoming very keenly aligned with the need to change.”

Matt Josefowicz, Managing Partner at Novarica noted that there were evolutionary and revolutionary changes facing the industry now.  The evolutionary involve changes to  process, product, data, and core systems.  The revolutionary changes involve structural changes facing the industry.

As an example of the latter, Josefowicz cited the ability of capital markets to access risk (cat bonds would be an example).  This challenges the current configuration of insurance companies, including information systems, which were set up to manage information. According to Josefowicz, the structure, including regulatory oversight,”was developed to meet an absolute necessity, and the absolute necessity that it was developed to meet is no longer there.”

If not Alignment, Then What?

Citing work by Henderson and Venkatraman, Chan and Reich write: “The business environment is constantly changing, and thus there may be no such thing as a ‘state’ of alignment. Strategic choices made by one organization frequently result in imitation by other organizations. Thus, strategic alignment is a process of change over time and continuous adaptation.”

The authors conclude that time lag is a fundamental problem with alignment theory:  “given that the business environment and technology change so quickly, once an IT plan is enacted, there is a high probability that the plan and the technology are already obsolete.”

Perhaps the state of play today is such that alignment by itself is less important than facilitating communication and ensuring a robust, flexible environment which supports change.  At the Analysts Panel, Chuck Johnston from Celent used the example of the introduction of Obamacare in the US which created massive change and disruption for providers of voluntary health coverage.  He noted the reaction from the insurers: “people are shrugging their shoulders and saying disruption is happening, now it’s something to manage.”

What Do You Think?

We’re interested in your thoughts about alignment. Has this been a part of your strategy?  Is so, how does it work for you, especially in turbulent times?  If not, what do you use to link IT and business strategies?

Business-Technology Alignment, IT Management
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May 09

Innovation/Collaboration Go Operational at #acordloma13

By Insurance-Canada.ca BlogEditorNo Comments

If we had a dollar for every time the mantras of Innovation and Collaboration were invoked at the recent ACORDLOMA Forum in Las Vegas, we’d have easily paid for our hotel bill and several meals.  There were lots of references to innovative thinking, collaborative processes,  innovative products, collaborative  technologies,  innovative delivery mechanisms….(you get the point).  This could have been just exercise in new buzz phrases, but, fortunately,  there were examples of disciplines being applied to  assist in reaching real, quantifiable results.

We’d be interested in your thoughts.  Can innovation and collaboration be operationalized to produce desired results?

Chubb & Son Put Innovation Into Process

Case in point was the presentation by Jon Bidwell, SVP and Chief Innovation Officer at Chubb & Son on ‘social Innovation in P&C Insurance’.  Bidwell cited what he referred to as the ‘Good Idea Paradox’, which says that while rigorous, repeatable processes are at the core of most modern management practices (e.g., six-sigma, LEAN, etc.), formal processes rarely yield innovation.  Moreover, empirical research (including Bidwell’s work at Chubb) demonstrate that when asked for suggestions, the highest value contributions tend to come from the lowest volume contributors to the process.

To address this, Bidwell has introduced an ‘Innovation Platform’  at his company which facilitates cross departmental discussions of suggestions using a social media metaphor.  In addition, the platform has tool to rapidly capturing ideas and patterns of conversations.  alternatives and facilitates rigorous scoring of the results in a time delineated framework.

Bidwell provided an example of a suggestion by a field marketer for a mobile tool which was taken from idea to working application in 60 days.

In practice, the technology platform is Microsoft Sharepoint with tools that analyze users’ patterns of utilization and  content analysis.  The user interface is designed to resemble social media which provides for ease of introduction to a large percentage of the user base.

At present, this platform is contained within the Chubb organization, but Bidwell indicated there are some discussions about taking this to select business partners.

Collaboration For the Masses

Karen Furtado and Mark Breading, partners at  analyst/consulting firm Strategy Meets Action (SMA), note that collaboration is a key element in extending innovation across organizational boundaries.  More significantly, there are methods that can be used by organizations of any size to funnel collaborative methods into operational actions with two techniques:  Ideation and Crowdsourcing.

The concept of Ideation is simple.  Get front line individuals to bring an idea to the table that would improve products, services, or processes.  Each member of the group defends his or her position and at the end there is consensus developed through some ballot process. This can be done within an organization or, as Furtado and Breading noted, across organizations, e.g. carriers and agents.

The use of social technologies – such as Twitter and LinkedIn – allows this principal to go a wider group (Crowdsourcing).  In order two bring some discipline to this, SMA recommends that the results of the crowsourced ideas be vetted by organizations with a structured methodology.

What Do You Think?

Insurance depends on predictability and, by definition, innovation and collaboration encourage some unpredictable behaviour.  Are the techniques above methods to channel unpredictability into new, productive results?

Collaborate with us and share your thoughts.

 

 

Collaboration, Innovation, Social Media
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May 09

In the Spring, Do Canadian Insurers’ Thoughts Turn to … Telematics?

By Insurance-Canada.ca BlogEditor5 Comments

With apologies to Lord Tennyson,  it appears that insurers might be putting telematics slightly ahead of other fancies in Spring 2013.  Part of the evidence is a mysterious ad campaign.  Are you feeling the pull?

Rumblings In The Wind

We have been noting the progress of telematics-based insurance offerings  in various geographies, such as the US, UK, Europe.  However, with the notable exception of Industrial Alliance’s Mobiliz programme, there has been a paucity of action  in Canada since Aviva’s Autograph programme was withdrawn in 2010.

According to our sources, that is about to change.  We are hearing that at least 10 insurers are conducting serious feasibility analyses on telematics-based initiatives and that there could be three to five insurers launching programs this year.

A Discount Guage and a Countdown Clock

The first might be as soon as this month.  There is an ad campaign that is being run on television, radio, the internet, and social media for ‘Ajusto’, with the tag line ‘On May 13, Take Control with Ajusto.’  The Visual on Ajusto.com offers something that looks like a tachometer with its needle swinging between 0% and 25%.  Underneath, there is a countdown clock to May 13th.

There has been discussion on LinkedIn groups and in a vendor newsletter that the sponsoring company is Desjardins Insurance, and that Ajusto will be the next usage-based insurance (UBI) offering, but Desjardins has been silent on the issue, and the @AjustoProgram twitter handle has only suggested everyone wait until May 13.

What Do You Think?

Is Telematics finally going to get some additional momentum in Canada?  We’d like you opinions.  There is a very short survey on Insurance-Canada.ca at  https://www.surveymonkey.com/s/DZ7T5JK.  If you’d like to expand further on the topic, feel free to leave a comment below.

After that, please feel free to return your fancies lightly to other thoughts.

 

 

Telematics
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May 06

What Do Agents & Brokers Do Anyway?

By Insurance-Canada.ca BlogEditorNo Comments

“What do agents/brokers actually do for a living?”  Over the last quarter century or so,  we have periodically asked insurance consumers and insurance carrier IT workers that question. We tend to get two very different answers, both of which are wrong.  Worse, we find the answers from the IT employees to be further from the truth than the consumers.  How does this impact technology that carriers deliver to brokers?

Some Perceptions and …

We’ve never done our poll scientifically, but the consistency of the responses over 25 years suggests that our conclusions close to reality.   The most frequent response from  carrier IT employees is: “They sell insurance.”

Insurance consumers, however, have a different take.  The vast majority of consumers say, “I don’t really know, but when I call them, they try to be helpful and my bill is usually right.”

… And Some Reality

While we don’t have deep knowledge of broker workflows, we do know something about transaction volumes.  A number of studies over the years have found a consistent distribution of work.  For the ‘typical’ personal lines broker, 10%-15% of transactions involve new business.  Another 40% of the transactions involve renewals.  The balance involve policy service, endorsements, billing inquiry, claims reporting,etc.

The customer service transactions are important to the customers, and to the insurers, but don’t typically drive any new revenue.  They do form the basis of long-term relationships with clients.

Successful brokers understand the importance of this. A recent blog post entitled  ‘Why Insurance Agents Fail’, blogger and insurance agent coach Brent Kelly, writes: “ If you are in the insurance business simply to make money, you will not succeed. Maybe in the short-term, but over time prospects and customers will see right through you. The will know you don’t care about them, you only care about you. …This is a people business. This is a relationship business. This is a service business.”

What Does This Have to do with Technology?

All very interesting, you might say, but why is this in an Insurance-Technology blog?  Many of these IT folks believe that broker technology must support driving new business.  On that basis, the natural tendency is to deploy technology that focuses on selling.  And when these employees get promoted to management positions, they direct development of applications focused on selling their companies products.

In other words, they spend most of the time on technology that impacts 10%-15% of the broekrs’ challenges.

When we have had the chance, we have sent these folks out to spend some time in a broker’s office and get them talking not just to the sales people, but to the operations folks and CSRs.  They typically come back with a better appreciation.

So, What Do You Think?

If you are a broker, do you think that our analysis rings true?  If you are work for an insurance carrier (especially if you ate in IT, do you feel you know about the broker’s job?  If not, does this screed help at all?

Leave us a note below.

 

Broker Technolgy, Broker-Carrier Relationships
May 02

Broker Marketing: Feed the Lizard

By Insurance-Canada.ca BlogEditorNo Comments

In the Polynesian culture, the gecko feeds on insects and carries the spirit of mo’o,  a mythological being which is considered to be a  protector of houses and villages.  In the insurance culture, the gecko feeds on Big Data and carries the brand of Geico, which is considered the destroyer of independent agents.  Maybe the lesson is all in the food.  We’d like to know what you feed the protector of your business.

Why Independents Don’t Like Lizards

Independent insurance agents and brokers don’t like geckos because they are ubiquitous in the world of personal insurance due to effective and persistent marketing and advertising using the Geico Gecko.  Geico only writes automobile insurance i the US.  However, as we noted in this space last October, the company has one of the highest brand recognition scores among Canadian consumers due to advertising bleed across the border.

Agents in the US and Brokers in Canada reference Geico and the Gecko in their marketing. Some US agents have approached this with humour (see “How One Independent Agent Tried to Off the GEICO Gecko.” in the December 2011 Insurance Journal, e.g.)  Several Canadian brokers and quote consolidators have taken out paid Google listings using terms such as Geico Canada “What it is and what it ain’t!”

The reality is that competing against the advertising/marketing budget of direct writers is not possible for most Canadian insurers, much less independent brokers.  There needs to be a different way, perhaps taking a page from the lizards own handbook.

Geiko’s Gecko was Born In a ‘Petri Dish of Data’

Advertising Age recently interviewed Geico’s Chief Marketing Officer, Ted Ward.  According to Ward, the gecko character was not the product of intense market research to design a long running campaign.  Rather, Ward says,

… we analyzed results from running the first set of Gecko TV spots and liked the bump in business volume. We were able to attribute the increased business to the campaign and decided to move forward with additional Gecko executions. From that point on we have incorporated more traditional market research to track and monitor consumer sentiment related to the little green guy.

 In other words, Geico used data to find out what worked and leveraged the results. What happens if our little green friend looses his slimy glint with consumers over a couple of quarters?  Our bet is that the Gecko will be back to foraging for insects.

 What Can Brokers Do?

Data and analysis costs are less daunting than they used to  be.  In our mind, that isn’t the hurdle facing brokers, however.

Ward notes that the cost of storing and processing data has dropped “so substantially that it is now possible to ‘crunch’ a myriad of internal and external data elements through complex algorithms”.  He adds   “Most of the core direct-marketing techniques of targeting remain unchanged, but the ability to more intelligently execute them is vastly different.”

Intelligent, consistent, evidenced-based execution is key.  Earlier this year, we noted examples of initiatives that insurers in the US and Canada are taking to support their agents and brokers.  We expect to see more of this and also expect that third parties will offer new and innovative tools to access and mine data.

What is required is discipline and consistency in the broker’s office to ensure the data are sufficient and correct, that marketing initiatives are undertaken and that follow up is taking place in a timely, consistent fashion.

What Do You Think?

We’d like to hear from you.  If you know of methods and techniques that work, we’d love to hear from you.  If you have seen things fall flat, those lessons are good to know too.

Help us all feed our inner gecko.

Big Data, Broker Technolgy, Insurance Marketing
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Apr 26

Are IT People Starting to Look Like Regular Employees?

By Insurance-Canada.ca BlogEditorNo Comments

Some recent employment-related data suggest that IT professionals have similar employment experience as other members of the working class. In fact, some IT professionals are actually reporting directly to business unit managers. Is this scary or does this offer opportunities?

Hiring Flat, Participation Down

As reported in Insurance Networking News, analysis by Janco & Associates find that hiring for IT jobs has come to a ‘standstill’ due in large part to the uncertain economic climate.  Moreover, some job seekers have actually left the job market.  INN quotes Janco CEO, M.V. Janulaitis, “The true unemployment rate would be over 11 percent,” if it included those people who have dropped out of the labor market.

Raises and Bonuses Normalizing, Outsourcing Cited

In conducting its 16th annual salary survey of IT professionals, Information Week found that “compensation for staffers is flat compared with last year and up only 3% for managers.”

Moreover, there are decreases in related benefits, including training.  Information Week comments:  ” And people are our most important asset?”

One of the main causes for the downward pressure is the use of outsourcing.  The fact is that IT people are getting accustomed to the use of outsourcing as part of the normal environment.  Information Week notes that the level of outsourcing has remained the same since 2004 and “IT pros aren’t quite as discouraged about outsourcing’s impacts as they were a decade ago.”

Situation Normal, With a Twist

For most workers,  low participation and downward pressure on wages is nothing new.  This might be the case of IT professionals joining the rest of the population.  And that might be a good thing.

One unique result is the movement of IT professionals into business units.  Information Week found that “One-third of the IT managers in our survey report to someone outside of the IT organization for at least half of their time, and one in five IT staffers do.”

This synergy has the benefit of exposing IT to the real world of business as well as offering the business benefits of the IT professionals.   And it helps the employee personally.  Information Week concludes, “For anyone looking for a spot as a highly valued, well-paid IT pro, combining a deep understanding of the customer with sharp technical skills is a strong place to start.”

What Do You Think?

Do you see IT moving towards the business environment more?  If so, is this a good thing?

Employee your talents, and let us know.

Business-Technology Alignment, IT Management
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Apr 22

The Telematics Business Case: What’s Still Missing?

By Insurance-Canada.ca BlogEditor1 Comment

While a number of  insurers ponder if  and when to enter the Usage Based Insurance (UBI) marketplace using Telematics, other insurers  are transitioning to Telematics Version 2 which include features and benefits to attract a wider audience and, perhaps, retain the initial UBI customer base converts, and improve overall profitability.

Our question to you:  Are these factors enough of a business case, or are we missing something?

Getting More and Better Drivers

In the US, Allstate recently announced that it was expanding its ‘Drivewise’ UBI program to an additional 6 states beyond the initial 10.  At the same time, the company has launched  a smartphone app which helps the insured or prospect estimate the impact of his/her driving habits on the premium.   According to Allstate’s Senior Product Vice President Ed Biemer, “This provides our customers a method to quickly identify ways to improve their driving and, at the same time, be rewarded for safe driving habits.”

The driver improvement model was pioneered in some respects in Canada with the Industrial Alliance implementation of the Mobiliz program (see our post in November last year).  Industrial Alliance was recently honoured by Celent with a Model Insurer award for this program.

Price Is Not The Only Object

Discounting need not be the only telematics tool to attract cusotmers.  In its Insurance Telematics Report 2013, UK Based Telematics Update noted that some customers “are not particularly price-sensitive, while others fall into risk categories that will not allow them to realize significant savings compared with their rating under traditional methodologies.”

The trick is to use the telematics data to develop additional value add services.  The report cites Towers Watson research which found several services attractive to consumers: vehicle tracking, emergency services, and emergency alerts.  Telematics Update notes that discovering such services are important even for price sensitive consumers as the playing field becomes more crowded and competitive.

Next Targets:  Retention and Risk Selection

The Telematics Update report notes that the jury is still out on the exact impact of Value Add Services (vs Discounting) on attracting new customers.  However, it does cite  Paul Stacy, of Telematics Supplier Wunelli, as saying that Value Add services may be significant in customer retention.

Continued improvement in Telematics on both personal lines and commercial lines accounts should offer opportunities for insurers to become more targeted in risk selection as well as underwriting.  This should provide opportunities for insurers to improve profitability as well as hitting growth targets.

So What’s Missing?

If we read this right, there are some very compelling reasons for insurers to get into Telematics.  However, some are still holding back.

We’d like your thoughts.  Ar we just seeing the good road ahead and missing the potholes just in front of the car?

Let us know what you think.

 

 

Telematics
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Apr 21

Policy Administation Systems Projects: Is 10% Success Enough?

By Insurance-Canada.ca BlogEditorNo Comments

Policy Administration Systems (PAS) replacements are top of mind with a large number of P&C insurers. A recent report from PwC suggests only 10% of organizations which have undertaken such projects have realized full business benefits.

Our Question:  Given all the challenges inherent in running a business and embarking on large projects, are these good enough odds for organizations to proceed? We’d like your thoughts.

What PwC Finds

The PwC report – Eye on the Prize – notes that “only 30% of policy administration projects meet the traditional definition of success in terms of time, budget, and scope delivered. And of that 30%, we observe that less than one in three realizes the full business benefits.”

For the balance,  50% of the projects were completed, but with cost/schedule overruns and without fulfilling all of the original benefit requirements.  Twenty percent of the projects were marked ‘Failed,’ meaning they were either abandoned or cancelled.

What Are the Obstacles?

PwC notes that PAS projects are so large and important that they need to be considered ‘programmes’ – enterprise-scope  initiatives that require tight coupling of multiple business units to business strategy and close coordination of a number of subordinate, cross-organizational projects.  PwC separates the common obstacles to success into two major categories:

  1. Inability to design, mange, and govern the program, which includes
    • the inability to staff critical program roles in a timely fashion,
    • resistance to change by users,
    • ignoring integration requirements until after the project is launched,
    • insufficient testing, and
    • lack of effective control over scope, time, and budget.
  2. The programme’s ability to deliver business benefits, which incorporates
    • inadequate attention to changing demands of users,
    • lack of alignment of underwriting, rating, and organizational strategy,
    • inability to meet data needs,
    • insufficient attention to forms and documents, and
    • failure to address data quality and data migration issues.

 What Can Be Done?

PwC provides recommendations and best practices to mitigate risk.  The recommendations for delivery of functionality include:

  • Customer and Agent experience:  Improve customer and agent interaction through the use of consistent user interfaces and workflows across key systems (e.g., policy, billing, claims).
  • Underwriting/Rating:  Align the program’s tasks to meet the carrier’s goals for underwriting and pricing automation.
  • Data and Analytics: Plan for the analytic needs of the data early in the process to prepare for information demand and avoid expensive rework later. Identify legacy data quality issues early, and develop custom rules and scripts to fix this data prior to migration.
  • Forms and Documents.  Consolidate and standardize forms where possible to reduce development effort and decrease future business and IT maintenance.

What is Realistic for Organizations?

While these and other recommendations in the report are excellent, they do add overhead to what is already a large project.  Time and budget considerations will put significant pressure on organizations to move forward with a less than perfect program, or risk doing nothing at all.

PwC’s report adds an analysis of best practices from several organizations which provides a reality check with ratings of ‘Leading”, ‘On Par’, and ‘Lagging’.  The report also provides commentary on organizations’ project management maturity and capability to use Agile project management methods.  These data suggest that there will be some challenges to many organizations which will have to make judgements on what represents a ‘good enough’ approach.

What Does This Mean? And What Do You Think?

Technology is not magic.  As good as modern systems and agile approaches are, they will not fix all problems with current insurance companies’ systems and operational environments.  Reports and recommendations by PwC and other analysts/consultants can be helpful in focusing organizations’ attention on what can be done, what risks exist, and what are methods to concentrate efforts to mitigate risks when (or if) undertaking ambitious programs such as policy administration systems replacement.

One key element is expectation management.  If stakeholders expect perfection, anything less will be a disappointment.

So, what do you think?  Is the 10% headline a surprise to you?  If you’re in the middle of a PAS implementation, does the PwC analysis match your reality?  And, most significantly,  is good enough better than nothing at all?

Share your thoughts below.

 

 

 

Business-Technology Alignment, Modern Technology
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Apr 15

Effective Social Media Tactics for Agents/Brokers

By Insurance-Canada.ca BlogEditorNo Comments

Nothing succeeds like success. At the February meeting of the Agents Council for Technology (ACT), Terry Golesworthy of the Customer Respect Group shared information on successful social media strategies and tactics for independent insurance agents and brokers. He was joined by some practitioners on a panel. We think they offer some good, common sense advice.  We’d like to know what you think and what strategies are working for you.

Focus Focus Focus

A number of Golesworthy’s points stressed the importance of focus and discipline. This seems to boil down to drilling into what gets the client/prospect’s attention and how to ensure that  that your information is engaging.

There is lots of competition for customer’s attention.  Golesworthy cites a Google study which found that the average consumer used 11.2 sources of information about insurance over a three month period before making a purchase decision.

Golesworthy stressed that agents had to decide upfront which communities the agent wants to reach first, then find out what social media platforms serve those communities.  The agent then has to have something interesting to say, and saying it in an interesting way.  According to Golesworthy, people like stories.

Engage Engage Engage

To be engaging, social media must be a conversation, not a monologue.  And the best conversation is consumers talking to other consumers.  Golesworth notes that USAA (a large, US-based direct marketer serving military and selected civilian government employees) encourages members to write reviews about their policies.

Communities can be discovered or built.  Golesworthy cites examples of ‘manufactured’ communities.  The Hartford, for example, created a community for people over 50 and encourage information sharing through the use of a blog.   Zurich has a similar approach for Real Estate Managers.

According to Golesworthy, independent agency insurers’  best role is in support of agents/brokers, because the agents are the ones with the best connection to communities.  Insurers can provide content, offer guidance and training, and offer promotions.

Case Studies

Golewswrthy was joined by several agents on a panel who shared their own experiences and tips.

  • Chris Paradiso‘s best close rate for Internet leads is within the first 5 minutes. Interestingly, he has the next highest close rate 6 days later, because of having a process of continuing to make calls to those prospects during those 6 days.  The agency creates 180-200 videos a year and put them on YouTube. It’s the second- or third- leading revenue generator.
  • Jason Cass runs a virtual agency in Illinois, with an assistant located in Colorado.  When he started, he had no idea of the power of social media.  He reports: “My goals were get leads online. I said I would be happy to write $20,000 in premium the first year. I almost tripled that. I spend $30-50 a month on Facebook. I get three or four calls a month through it.”
  • Chad Davis has a personal lines focus and now operates nationally. He got interested in workflows & streamlining and digital marketing. He watches Google ad words and can change things quickly. Sales people are independent contractors across the country. He checks the sales pipeline and what his sales people are closing. Chad takes advantage of digital marketing tools to constantly analyze the metrics.

What Do You Think?

There is a plethora of information about use of social media, and even more about precise ways to use it perfectly.  However, in the real world of insurance sales, common sense success stories are sometimes better than the most perfect plans, especially when just getting started.

We’d be interested in your own suggestions.  What have you found to be effective with social media?  How do you engage your clients/prospects?

And, if you’re interested in more Agent contact, the next ACT meeting occurs at the ACORD/LOMA Forum in Las Vegas, May 5-9, 2013.

Broker Technolgy, Consumer Insight and Action, Social Media
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