Insurance Agents Not Quite Ready for Social Media Revolution

“The insurance industry is not as quick to adapt to change as other industries,” but independent insurance agents need to acknowledge that having “a Web presence is non-negotiable,” said Michael LaRocco, president and CEO of Fireman’s Fund Insurance Companies.

“Forecasting the future,” LaRocco told California insurance executives that consumers today — “tomorrow for sure, but also today” — already are sharing and gathering information about people, products and brands through social media, which influences their purchasing decisions. It’s not just the younger generation that is using social media as a networking tool. He pointed out a video about the social media revolution that states 55- to 65-year-old females are the fastest growing segment of Facebook users. Given its total number of users to date, Facebook would be the world’s fourth-largest country. That means an insurance agents’ kids, sisters, brothers, colleagues are using Web 3.0, he said.

Yet LaRocco lamented that only 48 percent of independent insurance agents have Web sites, and of those, only about 20 percent keep the sites updated. “This is not good,” because having a Web presence is going to become a necessity as a networking tool throughout the world, he said. “We have to leverage opportunities to make us more efficient and effective.”

Leveraging social media tools is relatively easy, once you start, he said, noting it doesn’t require someone to write new computer code. “The cost of entry is low, and you can get into it in a very efficient manner if you have one staff person who understands and uses social media. … Once you spend some time with it, you’ll see rewards many times over.”

Social media can be used for discussions, rather than be used as a sales tool. Independent agents can use social media to become known as the “best source” for advice, LaRocco suggested. For instance, an agent could use social media to educate consumers on insurance topics, or provide a forum for disaster preparedness and recovery information. For agents who write personal lines and have customers who are going to college and coming off and on their parents’ policy, social media can be used as a tool to discuss family and social issues.

“You can get to a lot more people this way than on the gold course,” he said.

Putting up a picture of his 18-year-old daughter, LaRocco said the next generation of insurance buyers like her won’t want to communicate with their insurance agents in the same way as previous consumers. While Geico spent $800 million last year on advertising, independent agents can compete with that if they build the right relationships with their customers.

“(Customers) aren’t going for geckos, it’s a lifestyle choice,” he said. “That’s how they want to interact; they’re choosing an approach, not a company.” Thus, he said there’s no reason why an independent agent couldn’t also provide an online channel for customers to come through, but then provide an added bonus of professional advice when and how customers need it. The Internet also can help agents better target customers, such as to an association of dry cleaners, or potential customers in the immediate vicinity of a college.

“At the end of the day, insurance is a relationship business. But the relationship can be delivered in different ways,” he said. For instance, an agent could deliver information to a customer through Skype. Noting his daughter, LaRocco said she could be a future small-business owner, and isn’t likely to do business with someone who puts his or her head in the sand like an ostrich, gives up on trying new technologies and ultimately can’t meet her needs.

“The younger generation wants you to meet their needs in technology,” he said. “You’ve got to stay connected because information and recommendations about information is changing.”

The good news, however, is that “the sky is not falling,” LaRocco said. “The opportunity is great, because I don’t know that enough insurance agents will go here fast enough, and those that do will have an advantage. … Agents who adapt to the (social media) lifestyle and the needs of buyers and provide the added value of professional advice with personal relationships will not only survive, they will thrive.”

LaRocco was a featured speaker at the Insurance Industry Charitable Foundation’s 11^th Annual Educational Forum held in California in April 2010. The event was presented by the Mt. Diablo Chapter of the Chartered Property Casualty Underwriters Society and Insurance Educational Association and benefited Child Abuse Prevention Programs.

Editor’s Note: Following are examples of independent agents who have had success building their business with social media:

• California’s Crescenta Valley Insurance
• New York’s Bryan Insurance
• Texas’ Preferred Personal Insurance
• Atlanta’s Agency Edge Marketing

Academy of Insurance Class on Using Social Media to Build Business

Topics California Agencies