- Where Insurance & Technology Meet

Is This the Way Competition Ends: Not With a Bang, But a Widget?

Is a new app designed to make quoting and prospecting easier for smaller insurers and brokers an easy on-ramp to a social media road paved with gold, or will it turn out to be a tool underpinning the largest threat these players have ever seen?  Have a read and let us know what you think.

Anthony O’Donnell, writing in Insurance & Technology, recently reported on a a new application,which can be installed on a company’s Facebook page to provide quotes to visitors.  These quotes can then be saved and can be ‘liked’ or commented on by friends of the individual requesting the quote.  In the background, the company can store information on the visitors and follow up on the leads.

At present, the is set up for smaller financial institutions quoting on mortgages, however, Stephen Applebaum, a Chicago-based senior analyst with Aite Group, is quoted in the article: “With minor modifications, the tool can be used to provide auto loans and insurance quotes.”   Applebaum concludes, “Insurers should welcome social business technologies that offer them broad, rapid and low-cost access to the large, growing and often affluent group of consumers who use Facebook and other social networking tools.”

So where’s the problem?  Recall that, back in January, we noted that Gartner was predicting that within a relatively short period of time, social networks like Facebook, could use the data that they are aggregating on users to compete directly with insurers.  Here’s a scenario.

If a group of insurers – or independent agents/brokers – began using a tool such as Calcubot through a social network, the social media provider could be given a further leg up in becoming either an insurer or an intermediary through access to data.  The media provider wouldn’t even have to violate any privacy by tapping individual transactions, it could simply monitor the traffic to the quoting pages and aggregate the demographics of the visitors.  It would also be able to aggregate characteristics of the network contacts  who ‘liked’ the quotes.

A social network wouldn’t have to be an underwriter or licensed intermediary; it could simply partner with one or more carriers (or brokers, or both for that matter) who would describe their underwriting appetites, and the network would provide access to the data.

To get a sense of how this might be operationalized, have a look at  the New York Time article on how Facebook and NBC are teaming up to establish a lock on coverage of the summer Olympics, with NBC proving exclusive content on its coverage and to Facebook, in return for which, Facebook provides information on its users conversations as exclusive content to NBC.  The neat part of this is that it is not structured as an ‘advertising’ arrangement;  currency for the exchange of services is the data itself.  The Time reports that “no money was changing hands.”

So, is our scenario too far fetched, or could the adoption of social media tools for quoting ultimately support mass marketing of competitive products by much larger players (including the network itself)?  We’d like to know what you think and how you plan to use social media for marketing and lead generation.  Or, if not, how do you plan to compete against it.

Leave a comment below.  We promise not to mine your data.