Potential TikTok ban may impact how insurers reach Gen Z
A potential TikTok ban in the U.S. could sever a vital communication tool used to reach young policyholders.
The U.S. House of Representatives passed a bill on March 13, 2024, that could lead to a ban on TikTok, the popular and lucrative social video app that’s become an integral marketing tool for today’s businesses.
The legislation, called the Protecting Americans from Foreign Adversary Controlled Applications Act, requires the Chinese tech giant ByteDance to sell TikTok to a U.S.-based company within 180 days of the bill’s passing or face a nationwide TikTok ban.
House members voted with a resounding majority (352-65), and the bill now moves to the Senate before going to President Joe Biden’s desk.
TikTok users and advocates say the bill violates First Amendment rights. They took to Capitol Hill before the vote to make their voices heard at the behest of a TikTok post urging them to contact members of Congress. If the act passes, it could cost 300,000 Americans their source of income, gutting some small businesses that get the bulk of their sales from the app, advocates claim.
While many insurers do not use TikTok, some rely on it to grow their businesses and educate younger generations. Naturally, Jake from State Farm has a large presence, but many captive and independent insurers advertise and share educational content on TikTok. Losing access to this resource could substantially impact some insurers and younger insureds.
“TikTok’s algorithm is designed very well, where it shows content that you want to see and you should be seeing,” says Chris Costantini, CEO of Adelfia Insurance Services, which boasts over 3,200 followers on the platform. “It [a TikTok ban] will impact our reach and our ability to help other agents and customers out there … It’s going to decrease the knowledge and value that people are able to get quickly from a short one-minute video that explains coverages and explains how a policy works.”
A vital connection to younger generations
Costantini and others like him use TikTok to reach younger generations looking to learn more about their property insurance options, and many promote the benefits of working in the insurance industry. Most users are between 18 and 34, according to 2024 statistics published by Backlinko. The 18-24 group is just beginning to understand their insurance needs and the claims process, while the 25-34 cohort wants to know more about homeowners insurance, and many of them seek this information on TikTok.
“It’s probably going to have the largest impact on the youth because they are so active on TikTok,” says Costantini. “That’s the medium that they go to for knowledge, and so now there’s going to be a big gap in that knowledge.”
TikTok provides a wealth of information about many industries, and #InsuranceTalk is a popular topic on the platform. While banning the social video app may not affect most insurers, it will impact some companies that rely on sharing educational content to generate new leads. Costantini adds, “We’re going to lose money by getting less leads and make less of an impact. Our reach and ability to help and promote and bring value to other people out there is going to go down too.”
Representatives who drafted the TikTok bill allege it has ties to the Chinese Communist Party. They say the app poses a threat to national security because it’s owned by a foreign adversary.
This bill is not the first of its kind. Other efforts to limit or ban TikTok at the state and federal levels have failed. Senators seem divided on the measure, but President Biden has said he would sign the bill if it passed in the Senate.
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