Today's hurdles are undoubtedly the result of consumer disengagement from the traditional agency-distribution model. In the report, Aite asserts that carriers can no longer rely solely on agents to pinpoint the product needs and expectations of current customers and prospective ones. Another area where social media is vastly underutilized is claims, where “revolutionize claims handling.”

Conversely, social media is making the jobs of those investigating claims somewhat easier. More people are willing to serve up details about their daily activities for public consumption, often inadvertently revealing discrepancies in their stories, especially when that pertains to injuries for which the over-sharers collect workers' compensation benefits.

Nevertheless, the marketing paradigm on which companies have relied for years is of diminishing efficacy. Insurers realize that now friends and veritable strangers are able to sway the average person more easily than agents, traditional marketing, and ad slogans.

“It is said that insurance is at its core a relationship business,” Applebaum explains. “Since social media has significantly changed the nature of business-to-consumer and interpersonal relationships, it is fair to say that it has therefore fundamentally altered the P&C insurance business. As an increasing number of people use their computers and mobile devices to connect with friends, post their opinions, and engage in conversations, it is vital that thought leaders who deal with this new breed of consumer understand this phenomenon and prepare their organizations to thrive in a new world order in which customers wield more power and influence over businesses than ever before.”

Applebaum reports that “nearly two-thirds of internet-using adults also use social networking sites,” and that virtually all Millennials use social media, thus representing a large and untapped market for the industry.

Define and Defend Your Brand

He adds that even greater value can be realized if insurers social network more strategically, to provide the public with advice and information not only in the wake of natural disasters, but also to ensure they are fully informed and prepared ahead of such events.

“P&C insurers can no longer afford to ignore social media,” Applebaum concludes. “It is a permanent, transformative, and ever- evolving reality. Understanding and mastering it will be critical in myriad ways; connecting with customers in new and fundamentally different ways; building, defining, and defending a brand; and gathering vast amounts of distinct, valuable and granular customer information available in no other way.”

The 20-page report is available for purchase on the company's website.