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Look, I know that *** sells, so in the hope of getting more people to read my blog  I’ve even mentioned it in the title. However, in this case it isn’t just for blatent self promotion it’s because I’ve recently been doing some research into the use of social media in insurance for an upcoming white paper (I’ll post a link when it’s released) and I was surprised with what I found.

A simple search for australian insurance on twitter’s TweetDeck feed came up with the surprising result opposite. Apparently lot’s of attractive ladies on twitter love taking about insurance, especially while they are undessing too…doesn’t something seem wrong here?

It strikes me that if the usually conservative insurance industry is already bombarding the social media streams of twitter with faintly disguised messages utilising Cialdini’s principals of Social Proof and Attractiveness to sell their wares (btw Influence: the psychology of Persuasion is a great book to understand the power of social networks – and written long before Social Networking tools existed! ) then there must be an awlful lot of social media spam already out there. I guess these insurers must all be after the young male market (not traditionally a very profitable segment!).

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This blatent mis-use of social media by advertisers looking to cash in on a very cheap channel is the first glimpse I’ve have had at how not to use social media. The other commonly reported use of Facebook by insurers is in investigations to reduce or refuse the payment of claims or to identify undesirable risks. An insurance company armed with a Facebook picture of you on the beach playing football with friends will likely reduce your claims for work related stress or injury payments, and if you ‘like’ a photo of a car participating in street-racing or a movie like Fast and Furious…watch out for a premium increase at your next renewal.

It’s unfortunate that these are currenlty the most common business uses, as there are a number of potential benefits for business and customers of utilising social media as a channel, for example to monitor consumer sentiment, identify customer needs and provide improved customer service.

This is especially true for the financial services industry who’s main product is based on trust and the transfer of information. However, as happened with email direct marketing, the benefits for consumers of directed information can quickly morph into an avalance of undesirable spam and breaches of privacy, there always seem to be undesirable side effects of new communcation channels when business starts to exploit them.

I discussed many of the postive aspects of social media for insurance with the consultants from Ernst and Young recently. Rather than the untargeted, exploitation of social media (and ***) we see above, I discussed how the more customer focused and innovative Insurance companies are moving through three levels of development in Social Media, in an effort to improve customer interaction:

Level 1: Listening

Level 2: Participating

Level 3: Building into operational Processess

I’ll follow-up with a blog on these more positive examples of the use of Social Media in insurance in the near future. Business tools like SAP CRM are including social media managment tools to allow useful targeting, understanding and servicing of customers. We must remember that social media is just a tool that can be used to build or break relationships, and therefore it’s use needs to be included in business strategy.

We may soon be able to move to a paradim where the customers control the relationship, as I think that customers will expect a lot more than a picture of an attractive person when assessing their insurance needs. Maybe we’ll see a whole new class of consumer software develop to filter out the social spam…this maybe the killer use of Google+ circles, to keep insurance and sexy seperate…corporate relationship management anyone? 

You can follow me on twitter at paulgarrity.

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