I’m new to Insurance Edge but I have been invited to contribute by the venerable Ralph Savage what runs this blog site thing. So now I’ve got somewhere to talk rubbish and rant about stuff. Which is helpful.
I did see something the other day that made me smile/grind my teeth. The CII issued release that was picked up by the insurance trade press and appeared on various social media outlets regarding a potential new insurance market.
According to the CII, social media cover is an area ripe for exploitation. It conducted some research that showed the yoof, or generation Y as consultants insist upon calling them, had concerns about how their online identity was used. There also appears to be concern around social media profiles being hacked etc.
Never one to miss an opportunity to capitalise on fear, the insurance industry has already caught a waft of the potential lucre to be creamed here. Which is fair enough – insurance companies are commercial enterprises and are in the business of making money.
But riddle me this – what the hell do insurance companies and their ilk know about social media never mind the risks associated with it? I’ve had years of experience dealing with insurers and brokers and believe me when I say they have hardly been early adopters of social media.
Most of them have a vague awareness of its existence, are scared of it and wish it would all just go away so everyone can settle back down into the 80s. I’m being harsh but I’m that way inclined today.
This is an excellent example of the industry jumping into markets it doesn’t understand in a bid to get that all-important growth. Who cares about the underwriting? Get the premiums in and the investment returns will fill the gaps.
It’s not until the claims come in and companies burn through their reserves that they start to pay attention to the actual risks they are taking on. If insurers pile into social media without properly understanding the risks, there will be tears before results time.
It just winds me up an industry that has, by and large, ignored social media and derided it as a fad, now wants to pile in and make some money out of it. If insurance wants to make some money out of this fast-growing sector, it would do well to get a grip of what social media is and means before it start issuing policies.
However, I fear that companies will simply hire some suitably spotty youngsters who will “cover off the social media angle” and believe that will suffice. They will get their fingers burnt if they don’t do this properly and I for one will gleefully say “I told you so”. I’m petty like that.
I think I’ll try to be more approachable in my next blog.