When it comes to social media, the insurance industry needs to change how it evaluates risk. That’s the opinion of George Redenbaugh, assistant treasurer and senior director of risk management for eBay, where he is responsible for enterprise risk management, risk insurance programs, treasury systems and international cash management for the company.
When you talk about social media, those company assets are not physical. “Data and how you connect the data become the most important assets,” he explained. And that means “the intrinsic assets of a company — what insurers are insuring — is changing.”
Unfortunately, far too few companies understand and are offering coverage for social media risks, Redenbaugh said. That’s in large part because a number of insurance companies are trying to understand what social media means, and how it fits into their own day-to-day operations.
For instance, Don Doyle, Northwest regional executive for Zurich Financial Services, said he has just begun to set expectations and develop a pattern of communicating on key issues using social media tools within his own company. He noted he is developing microblogs to communicate with his staff, and he’s translating his business plan into a seven-minute vignette using Brainshark, an on-demand presentation company.
Gil Goetz, who is in charge of Marsh’s retail wholesale industry practice in the West, said he is curious what risks are associated with viral marketing, and the company is hosting a Webinar on the topic in February.
While insurance agents might speculate about the risks associated with social media connections — there are concerns about privacy issues, defamation, legal issues, as well as how data is stored and shared — the insurance industry may still be getting up to speed as technology changes.
Yet a company that isn’t aware of social media risks might be missing important coverage areas. Redenbaugh shared an example of a California technology company, whose building was recently damaged by fire. The most expensive damage to the company wasn’t in the equipment or furniture, it was the loss of data. When companies are conducting most of their business and interactions online, data becomes the most valuable asset, he said.
“The computing cloud is here,” Redenbaugh warned. He noted that the insurance industry should not just be aware of the potential risks associated with social media, but it should also be aware of potential revenue opportunities.
He suggested the industry think about Apple, and applications developed for the iPhone. Mobile consumers spent $4.2 billion in 2009 at mobile applications stores, and that figure is expected to jump to $30 billion by 2013, according to a report from researcher Gartner
“How much of that is the insurance industry participating in?” Redenbaugh asked.
“None,” he answered.
This illustrates there’s an opportunity to create awareness, and to help companies understand what social media means to their businesses, Redenbaugh concluded.
Redenbaugh, Doyle and Goetz were speakers at the Golden Gate Chapter of the Chartered Property Casualty Underwriters Society meeting in January. John Kronenberg manager of the Gen Re San Francisco and Seattle Casualty Facultative branches, also joined them on the panel presentation, “2010 State of the Insurance Market.”
Was this article valuable?
Here are more articles you may enjoy.