Get your car, home and life insurance directly through Facebook or Twitter? A research group known for divining technology and consumer trends is predicting just that.
Analysts at Gartner say major social media sites may look to create revenue streams by offering insurance and financial services in the near future to the millions of people who spend time on social networking sites.
In the "Gartner Predicts 2012" report, Gartner analyst Juergen Weiss points out that Facebook users and others share all sorts of personal tidbits -- from getting married to announcing births and job retirements -- that could be used to sell insurance.
"Offering insurance products to their communities would be a natural extension of social media providers' financial services strategies and would allow them to capitalize on their extensive set of information they constantly collect about their users," Weiss writes in the report.
Weiss notes that more mainstream insurance companies may be threatened if social media outlets circumvent them and offer auto insurance, home and life policies on their own. The future is evolving, he says, and destinations like Facebook have a lot of power in determining what shape it takes.
"There are a wide range of options for social media providers that are considering how to actually offer insurance products to their users," he notes. "These options range from alliances with traditional insurers white-labeling their products to the formation of their own intermediary business units."
While Weiss concedes that insurance companies already use Facebook, Twitter and others for product promotion, he claims they aren't very good at it. "Many insurers are active on social media websites, but the vast majority fails to attract any significant user attention or to effectively motivate consumers to take action and buy insurance," Weiss contends. "Gartner estimates that less than 10 percent of all insurers active on social media websites have developed a sophisticated social media strategy."
Don't bury the big insurance firms just yet
Pete Moraga, the spokesman for the Insurance Information Network of California, says Gartner's report is intriguing, but not much more at this point. "Interesting, but there are many 'ifs' (in the report's predictions) and many obstacles to Facebook or others selling their own products," Moraga says.
One of the tallest hurdles is that each state has its own regulations controlling insurers and what they provide to consumers. Without universal guidelines, Moraga says, it could be difficult for social media companies to market policies on a nationwide scale.
"How would they successfully target everyone, knowing that laws are on a state-to-state basis?" Moraga asks. "Their platform is so broad and global; I would think that could be a problem."
He also notes that convincing consumers that their privacy is protected has been an ongoing issue for sites like Facebook and Twitter. Mainstream insurers and financial service companies, have been more successful in proving they can safeguard a client's identity and privacy over time, Moraga says.
But he does agree with Gartner's suggestion that insurers must continue to nurture consumer loyalty while finding ways to forge relationships, including selling and marketing products, with social media sites.
"There's no doubt that insurers depend on clients keeping coverage because they're happy with a provider and feel attached to them," he says. "The industry is all about keeping those relationships (and should use) Facebook and others to strengthen those relationships."
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