The forecast for Insurers is Cloudy with a chance of Social Media
Right. The “cloud” or cloud computing, a term that means different things to many people but retain the same basic concept: my data, in the sky. For insurers, this could simply translate to less investment in hardware, increased scalability, and reductions of IT maintenance costs. But wait, there is more! Then there is social media. The chance for a brand to connect and “befriend” customers in ways never seen before, a social exposé for the marketing realm. Nowadays, the need for insurance companies to involve social media as part of their core marketing initiatives has become a requirement in order to compete in a Darwinian economy.
Although the concept of cloud computing is not new, this upgraded version of the old utility computing promises a new way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or having to license new software. For insurers, moving their applications to the cloud can increase their ability to compete in a much larger scale while keeping the growing pains at bay. In fact, some insurance companies have already opted to move their policy administration, claims, distribution, and underwriting applications to a SaaS (Software as a Service) Cloud model simply because it requires less investment in hardware, and allows carriers to pay only for the capacity they use and scale it up on demand. It makes sense.
In addition, looming in the “clouds” are the likes, tweets, pluses, shares, and hashtags of social media. Long gone are the days when the insurance industry lagged behind in using social media campaigns as part of their marketing. The widespread adoption of social channels like Facebook, Twitter, and Google Plus by insurance carriers have grown exponentially along with their likes and followers. In many ways, all that user-generated content (likes, shares, pluses, comments, etc.) affect the overall perception of Insurance companies’ brands in the minds (and hearts) of people, influencing their reputation and trust. However, the real benefit here is the golden opportunity of connecting with each individual customer at a personal level, with their vacation photos, opinions, large (and small) purchases, pets, kids, weddings, parties, graduations, births, and “selfies”, something that was virtually impossible just a decade ago! This matters because at the end of the day in a “social” marketplace, people will always buy from people.
The forecast is indeed “cloudy” for the insurance industry (and that is a good thing). Cloud computing continues to grow as “the” option to support new initiatives in the distribution process as well as in social and mobile technologies that are demanded by today’s consumers. So, if there is one takeaway on cloud and social media for insurers, then the obvious one is that the cost-benefit of moving core and non-core applications to the cloud along with using social media to engage in real time with your customers is kind of a magic formula for success: reduced costs + increased efficiency + real-time customer engagement = revenue growth. That is true #DistributionModernization.