Compounding the challenge of rapid evolution is “Web 2.0″ is a broadly defined term. “Although more and more, Web 2.0 has come to mean participatory media–blogs, customer reviews, wikis, social networking sites–it can describe a lot of different technologies depending on whom you are talking to,” says James Wisdom, director of new media at Aflac.

Technology consultancy Novarica, for instance, includes social media, blogs, and wikis in its definition of Web 2.0 but also adds mash-ups, the cloud computing model, and AJAX Web application development. But rather than quibble about the exact definition, insurers should instead focus on the capabilities represented by the “generation 2.0″ of the Web, according to Matthew Josefowicz, director of Novarica's insurance practice.

The majority of carriers in a 2008 survey by Novarica were at least “playing around” with Web 2.0 (see graph, p. 17). “Some of the big national brands certainly are approaching social networking as part of their online marketing strategies. There are companies that have a presence on Facebook, building interactive quizzes, and post blogs to draw users into traditional Web channels,” Josefowicz says.

However, the percentage of insurers actually seeing a real business benefit from Web 2.0 was much less; for instance, only four percent of insurers were deriving value from the usage of social media. Although Josefowicz contends this percentage undoubtedly has increased from when the study was completed last year, creating business impact from Web 2.0 in general, and social media in particular, remains difficult for carriers.

“It's an important part of an online marketing strategy, but it's not changing the world,” he says.

FINDING VALUE

CIGNA, Aflac, and Progressive are three insurers that have found value in Web 2.0 tools. For Progressive, the first major carrier to have a Web site and sell policies online, supporting the latest online channels is a natural extension of the company's marketing strategy.

“It's in our DNA,” says Lehman. “We recognize we need to play in all these spaces to be consistent with our goal of listening and interacting with our customers wherever those customers are. Web 2.0 also is a great way to get qualitative feedback.”

In addition to a presence on Facebook and Twitter, Progressive has a YouTube channel that features both commercial content as well as consumer safety and education videos. The company's MyRate blog includes information and commentary related to its pay-as-you-drive auto insurance program.

Progressive's intent is to augment, not replicate, the progressive.com experience on different venues. In deciding what Web 2.0 venue to support, Progressive follows a process that matches features to purpose.

“We work to understand why some sites are popular with customers. Twitter is a great tool for one-to-many communications and for real-time search and understanding what people are saying about Progressive or our competitors. Facebook is a great mechanism for local interaction and sharing,” Lehman says. “We look at the innate benefit of a particular site and measure each by metrics that are available–followers, fans, views, and so on.”

Aflac has a clear objective for Web 2.0. “We want to be engaged with our customers in terms of the channels they consume,” Wisdom maintains.

After identifying a channel popular with customers, Aflac evaluates how well it matches the company's brand image. “Every social media outlet has been targeted to a particular audience,” Wisdom says. “We look at the focus of those platforms to determine whether being on them will reflect positively on us.”

Facebook was a perfect venue for Aflac's trademark “spokesduck,” which has its own page. “Facebook is perhaps unique in that it has spanned every age bracket and every demographic, whereas other sites such as Bebo focus on a much more limited demographic,” Wisdom remarks.

For Aflac, the impact of Web 2.0–Facebook in particular–has exceeded expectations. “We anticipated the duck would have about 15,000 fans in a month,” he says. Instead, it had 80,000 in its first month and nearly 150,000 after three.

“Given fans have about 170 people [each] in their network, that's potentially millions of additional impressions,” Wisdom says.

Aflac uses the Facebook Insights analytic tool to slice and dice fan demographics and engagement activity.

“One of the things that amazes me is that the duck's page has a higher engagement level than all the top brands we tested,” Wisdom reports. “How our audience members are different is they visit the duck's page frequently and thumb up content, or they'll post comments to his wall. So, what we're achieving is a brand that not only has a presence out there but an engaged fan base that is excited about it.”

However, whether that excitement translates into revenue, Wisdom can't say for sure. “It's difficult to measure social media ROI absent of a larger ROI enterprise model that can deal with media impressions across various platforms,” which the company currently does not have but is a key objective for the near future, he says.

Progressive uses preexisting internal tools to track new sales, customer saves, and other metrics related to traffic on various Web 2.0 venues and also monitors those venues using tools available at the sites themselves. While Lehman declined to assign a dollar amount to the overall impact, he says it has been measurably positive.

“We track sentiment of what's being said about us and our competitors. In our Facebook page, we have acquisition banners we generate click-through from. We also have features that encourage customer engagement, such as a pet photo upload. On the customer retention side, we track customers we save by reaching out to them through these venues or by directing them to other service channels where we can better help them,” Lehman explains.

PUSH VS. PULL

Although the advent of the Web itself helped put more information at the fingertips of customers, information alone may not generate a sale or solve a problem. Effective two-way communication is essential–a capability not provided by brochureware sites.

Used intelligently, social media addresses the longstanding problem of asynchronous, one-way communication among carriers, customers, and agents in the insurance transaction, while rich Internet applications and other Web 2.0 capabilities provide targeted information and create greater customer engagement.

“Web 2.0 has a different delivery model. It's bidirectional, and we believe there is a significant audience to be garnered from it,” Wisdom says.

Carriers also have discovered one of the key marketing propositions of Web 2.0 is, instead of simply pushing information out to customers and prospects, the interactive and participatory nature of networking venues pulls interested customers in.

For just over a year, CIGNA has been using Web 2.0 to deliver content to the public–publishing videos, creating podcasts, sending tweets. But earlier this year, the company began using social media monitoring software from Filtrbox to search tweets, wall posts, blogs, and other consumer commentary for issues related to CIGNA, then reaching out to those individuals to see whether they need assistance.

“We're not just trying to push out information; we're trying to pull in people who need help and trying to address their issues one by one. That's a better approach,” says Joe Mondy, assistant vice president of IT communications at CIGNA.

Initially, Mondy was solely responsible for monitoring this activity, but this proved problematic when customers began providing personal information through insecure social sites.

“When people say they want to do more communication on social media, some don't realize how open that is. Sometimes, information we can't share because of our own internal controls and regulations [customers] will willingly divulge. Therefore, while we approach people on various sites, we move the interaction into a channel that can be secured and protected,” Mondy says.

Additionally, the company quickly discovered another challenge. Customers calling a traditional call center or using a CIGNA-provided Web tool would choose the appropriate options for a specific question. In contrast, tweets and postings could cover any issue on any number of products. The company created a team known internally as “iSolve” to address this diversity.

“What makes the iSolve team members different from everyone else in service is they are the folks who have input to all our aspects of service–health and medical plans, dental, and pharmacy. They have a 360-degree view of customers, whereas in the past, there was one person for pharmacy, one for dental, one for medical, and so on,” Mondy says.

CIGNA has been pleased with the impact of its Web 2.0-based customer outreach. “People are stunned someone actually is listening and cares and responds to them,” Mondy says. “Unfortunately, the notion most people have in their minds about insurance companies is we are a castle with a broad and deep moat around us and we want to avoid interacting with individuals. But even if that were ever true, it's certainly changing today. We want to be accessible to members 24/7, and part of that is social media.”

Although Mondy reports nearly every individual CIGNA has reached out to has responded positively to the company's proactive approach, requests originating from social network monitoring account for only a tiny fraction of the 100,000 members served through CIGNA's traditional call centers. “It's really a nascent thing, but it's still an avenue we want to support,” he says.

Both Aflac and Progressive likewise monitor tweets and Facebook postings and in general monitor brand buzz across the Web. “We look for positive testimonials, which are far more frequent than complaints,” Wisdom says. “However, we also look for customers who are complaining about the brand, and we identify whether there's anything we can do to service those customers better. That has unique challenges by channel, because oftentimes people do not provide enough information where we can identify them for outreach.”

“We are out on a real-time basis searching for areas where we are being mentioned,” Lehman says. “We've set up an infrastructure internally to do that, which is working quite well. We are pulling in or reaching out to prospects at the same time we are using these media venues to push out content that is relevant and timely.”

Progressive also uses social media for catastrophe claim response. “In major weather events, we've used Twitter to communicate out a message in a rapid and real-time basis,” Lehman says. “That's proved to be an effective means of quickly and concisely disseminating catastrophe-related information.”

BLOGS, WIKIS, AND INTERNAL
COLLABORATION

Web 2.0 is more than the 2009 equivalent of a party line. CIGNA uses Web 2.0 internally for information sharing and collaboration purposes. The company also has its own interactive applications available through the “itstimetofeelbetter.com” portal, including the “CIGNA Water Challenge,” where the company donates clean water to children in India for correctly answered questions.

“We've provided a lot of educational information in an entertaining format to help people understand the impenetrable terms the insurance industry can use,” Mondy says.

The company also has piloted a presence on Second Life not as a means to sell insurance directly but as an informational venue. “We're trying to create virtual communities where people who would not feel comfortable with some activities, such as going to a seminar on weight loss, instead can attend as an avatar and learn things differently,” says Mondy.

The results of the pilot have been “intriguing,” Mondy adds, but the company does not yet know whether the project will go beyond pilot phase. “We're continuing to review the results to find the best way to package and deliver it,” he explains. “We want to be smart about how we ultimately and formally introduce it, because if you put out something that is half-baked, it will turn people off. We're taking a deliberate approach so that when we do introduce it, it's at the appropriate time, targeted to the appropriate people, to get the
appropriate response.”

Aflac currently is working on an aflac.com redesign, targeted for year-end launch. The company is striving for what Wisdom calls “a higher level of Web 2.0 integration” as well as cross-venue consistency. Aflac also needs to address the fact that, although it has a well-recognized brand, not everyone fully understands what products the company provides, indicates Wisdom.

“We need to create branding components that will cross over from print to broadcast to sponsorship to social media,” he explains. “We want to provide an enhanced brand to our customers across channels, better defining our product and our value proposition.”

One of Progressive's goals is to make as much of its site content as “sharable” as possible. “We've been working toward that since late 2007, when we added RSS feeds,” Lehman notes. “We added podcasts, photo uploads, and slideshows as well as a 'share this' box on progressive.com. The definition of 'sharing' continues to change, and we continue to adapt.” Progressive also uses blogs extensively within the company for interaction among senior leadership and between leadership and staff, as does Aflac.

Blogging and using other Web 2.0 technologies within the corporate walls are smart applications of the tools, according to Josefowicz. “The real power and potential of internal wikis and blogs is they move conversations out of e-mail and into a more public forum where they are easily accessible and searchable. It's not just two underwriters e-mailing each other about a particular case; it's taking that knowledge and making it available so that when others are faced with a similar case, they have access to it,” he points out.

“The systems themselves are relatively inexpensive to set up and work with–the investment that needs to be justified is relatively minimal,” Josefowicz asserts.

PUBLIC SCRUTINY

For insurers, a potential downside of social media is its openness.

“There is a great deal of concern with the notion of information control,” Mondy says. “Number one, we train our people very well in terms of what information can be shared and what can't be. We direct people how to take discussions that may veer into personal health information into realms where that information can be protected and encrypted. We did a lot of upfront work to ensure we had those 'bright lines' before we ventured into social media.”

Additionally, insurers may be concerned about negative feedback in the public arena. Insurers that wish to establish a presence in participatory venues need to assess that risk.

“We do need to tread these waters carefully,” Lehman says. “We preview comments on the MyRate blog but only to look for profanity or posting of personal information, which is consistent with other corporate blogs out there. We leave negative comments out there, and where appropriate, we will respond. Part of engaging customers in this medium overall is to allow for what could be negative comments. We think it's an important piece of the puzzle.”

Wisdom agrees. “If we see a specific complaint, we'll try to address it with the customer. If it's a generic complaint, people are entitled to their own opinions,” he says.

Aflac has witnessed a definite upside to having a public presence in the Web 2.0 space, he adds. “We see 'micro testimonials' constantly–people talking about the impact we have had. That shows up on the duck's page as well as on the posters' own networks. Because that testimonial isn't coming from us, it's more credible.”

MOVING TO 2.0

It's tempting for insurers to dismiss the hype surrounding 2.0 as simply the latest fad. Josefowicz maintains this is a risky outlook.

“We're trying to caution insurers they should not view the Web 2.0 hype as many of them looked at the 'Web 1.0' hype,” he explains. “If you look back at insurers that didn't want to have Web sites or didn't want online quoting capabilities, certainly it was very high in the early days of the Web and is even relatively high today. But the advantage to companies that could leverage it intelligently and balance the risk management with the opportunity is substantial.”

While conceding “nobody is going to make money by being the best Web 2.0 insurer,” Josefowicz advises carriers should be aware of capabilities in the marketplace and incorporate technology and functionality where it makes sense.

“It could be using internal social networking and user-generated content to strengthen relationships with geographically distributed staff. It could be wikis and blogs for agent relations, or social media for online marketing,” he says. “It's always easier to say no and put your head in the sand, but that's not the best option.”