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Social Media a Must For Insurers

December 2nd, 2010 by Lori Reed

For years, businesses have been reaching out to consumers through technology. Now, social media websites and cell phone applications are just a couple of ways companies engage with clients.

Their strategy goes along with the notion that a business needs to be where the consumers are. As generation Y continues to age and earn more money, its insurance needs will grow. However, insurers may not be as savvy as some other industries in terms of using technology as a marketing tool.

A Reuters article by Ben Berkowitz recently discussed the importance of using technology to engage with consumers. The piece included interviews with several representatives from various insurance companies, including Allstate’s vice president of e-business, Bob Wasserman.

“A very significant number, up to a majority, of wireless users will have these devices with them and they expect to be able to interact with companies through these devices where they are,” said Wasserman. “You start to think about what this device can do and you build other capabilities.”
A number of auto insurance companies, for example, have developed phone applications which walk customers through the process of filing a claim. Others applications are more for fun and feature company mascots and games. While such actions are a step in the right direction, more can still be done.

Berkowitz points out that banks are generally friendly towards the technologically savvy consumer. Many institutions, he notes, offer online transaction options. Some banks exist purely online.

In September of this year, the Life and Health Insurance Foundation for Education developed a Facebook app and contest to help promote Life Insurance Awareness month. The app encouraged people to share stories of those who play an important role in their lives.
LIFE Foundation senior vice president and chief creative officer Jon Dressner says creating the app was a way to use social media to engage with clients.
“With more people turning to social media and the Internet for advice and information, the ‘What Matters Most to Me’ App and Contest provides producers with a fun and engaging way to get their clients and prospects thinking about their need for life insurance,” said Dressner.

The LIFE Foundation and Allstate are just a couple of examples of how social media can be used to make insurance something consumers can engage with just like any other product or brand.

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Healthcare Reform May Create Struggles for Industry

December 1st, 2010 by Lori Reed

The stakes are high for policymakers to make healthcare reform a success. As the changes get underway, it remains to be seen how they will affect insurers. A study conducted by Conning Research and Consulting reveals that the medical professional liability industry can expect its profit margin to shrink, as the result of more competition and tighter regulations.

Conning analyst Jeffrey Thompson says the future for medical professional liability insurance looks bleak.
“Two forces may drive this line of insurance back into unprofitable waters – competition and an increase in loss costs. Competition has begun already, with price-cutting, acquisitions, new entrants, and continued growth of self-insured vehicles,” says Thompson. “Loss cost growth has been slower to develop, but we believe a number of conditions are aligning for this to take off.”

The researchers at Conning assert insurers will have to rethink how they operate if they intend to be successful in the new age of insurance. At this point in time, only a handful of the new healthcare law provisions have been implemented. While President Barack Obama signed the Affordable Care Act earlier this year, portions of the law will not take effect until 2015.

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Some Insurance Companies May Offer Green Discounts

December 1st, 2010 by Lori Reed

Auto insurance agents who want to provide their clients with the highest levels of customer service may want to keep themselves aware of any discounts insurers may offer for those who drive vehicles such as hybrids and electric cars.

This is because some companies have determined that individuals who drive eco-friendly vehicles tend to be less likely to cause accidents and file auto insurance claims. However, there has also been data suggesting that these vehicles tend to carry higher repair costs when they are involved in accidents.

Several leading automakers, including Nissan and Chevrolet, have announced plans to introduce electric vehicles to the mass market in the coming months.

However, a report from J.D. Power and Associates is raising questions about just how much this new generation of eco-friendly vehicles will catch on with consumers. The company indicated that it expects 5.2 million battery electric and hybrid electric vehicles to be sold in 2020, which would be about 7.3 percent of the worldwide market total.

In 2010, these eco-friendly vehicles accounted for 2.2 percent of the total market share. The study projects that 44.7 million vehicles will be sold in 2010, with that figure rising to 70.9 million in 2020.

“Based on our research of consumer attitudes toward these technologies – and barring significant changes to public policy, including tax incentives and higher fuel economy standards – we don’t anticipate a mass migration to green vehicles in the coming decade,” reported John Humphrey, senior vice president of automotive operations at J.D. Power and Associates.

Humphrey also cited the “considerable interest” in electric and hybrid vehicles that can be found in government agencies and media outlets, and among environmentalists. However, he pointed out that “consumers will ultimately decide whether these vehicles are commercially successful or not.”

Agents who also sell home insurance may also want to be aware of any discounts that are available for eco-friendly upgrades to homes and businesses. For example, some home insurance companies offer discounts for energy efficiency upgrades and renewable energy systems. One reason is that the industry in general is concerned about the catastrophic financial losses that potential climate change could help bring about in the coming decades.

Another thing to remember is that insurance companies offer discounts for a wide variety of reasons, such as affiliation with a certain educational institution or a profession such as teaching, or for young drivers who get good grades in school.

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