Insurance companies that are early adopters of social media could capture a competitive edge that is significant enough to have positive credit implications, says Moody’s Investors Service in a new report.
The rating agency reports that a survey of 66 U.S. insurers (both life companies and property & casualty firms) finds that 86% of companies plan to increase their use of social media in the next year. It also found that the most common use for social media is to promote brand. And, firms are using social media for marketing, both between agents and clients, and between wholesalers and advisors, Moody’s reports.
“For U.S. insurance companies, social media programs are in their early stages but based on our recent survey, many companies expect to make increasing use of social media in the future even if there isn’t a direct link to sales,” said Scott Robinson, senior vice president at Moody’s and author of the report.
“However, we do see social media use as a potential future credit positive for early adopters, since over time their experience will likely give them an edge in branding and marketing relative to latecomer competitors,” he added.
Moody’s notes that the survey also found that “while it may make sense for insurers to use social media in underwriting or even as an input to pricing, insurers are approaching such an idea with extreme caution. This may be due, in part, to legal and regulatory concerns regarding the use of data.”