Does The Insurance Industry Need Facebook?

By April 21, 2014April 8th, 2015No Comments

play_a_thomson_gb1_576In an article last week, Denise Garth of the Insurance Networking News waxes poetic about the impact of AXA Insurance’s new partnership with Facebook. She coos about the ways in which this puts AXA at the forefront of customer experience and likens it to Bobby Thompson’s famous “Shot Heard Round the World.” Meaning, I guess, that the insurance game is over? That AXA is the Giants and Customers…are the Dodgers? I guess that makes Facebook  Giants manager Leo Durocher? Or maybe Willie Mays. I’m not really sure where she was going with this or why she picked that euphemism.

Anyway, poor historical correlations aside, I have some questions about how big a deal this will actually be. Denise Garth seems to enjoy stating stats about Facebook and making vague claims that they’re related to insurance. “Tons of people use Facebook. Therefore, this is a revolution in Insurance customer experience!”

Facebook is a beast for user engagement and social networking. There’s no doubt about that. But are those really arenas that insurance needs in order to revolutionize its business? I don’t think it is–I question how much people really want to chat with their friends about insurance.

It’s also interesting that the author keeps claiming that Facebook is a master of customer experience. It isn’t. In fact, the company is pretty bad at interacting with their users–they’re known (and hated) for their constant violations of user privacy, of forcing new, unwanted features on users, and generally being insensitive to what users want. The Facebook to User relationship is pretty terrible–but people don’t use it for that: they use it for the friend to friend relationship. And most of what Facebook does tends to degrade that experience.

A much more interesting arena would be a partnership with Amazon/Zappos. Those are companies that have really broken apart big, difficult questions facing the insurance industry:

  • How do you move what was primarily an in-person a sales model online?
  • How do you make customers feel confident making big purchases online?
  • How do you make an online buying experience easy and pleasurable?
  • How do you provide service that rivals anyone else’s?
  • How do you turn one-time buyers into repeat, loyal customers?

I don’t think the insurance industry needs much of what Facebook can offer. Anyone who can tap into Amazon’s knowledge (not to mention technology, innovation, brand and customer loyalty) on the other hand, would be poised to make a killing.