Twitter – Who, What, Why in the Insurance Industry

Twitter activity in the insurance industry has settled down from its heyday in the heat of last summer. It is now time to ask what role twitter can play? Are you really reaching customers through Twitter?

The uncertainty surrounding compliance has been a drag on the enthusiasm for many companies as the risks can outweigh potential benefits. For those companies that have already embraced Twitter, the excitement seems to be dropping. New FINRA guidelines have loosened the knot a little but as one industry executive recently said, “this might just be so we can hang ourselves”.

In this context, we examine recent Twitter activity as companies constantly review their positions.

Industry follower count continues to grow, and there are now over 42,000 followers for the major insurers, but the rate of growth has declined. Growth rate averages 10% per month, still impressive but against 30% last summer it look pedestrian. Much of follower growth can be attributed to initiatives from newly entering companies building up initial base counts. Of the top 20 insurance tweeters, by follower count, all bar one saw their growth rate decline. USAA is now growing its follower count by 3% per month, down from 6% last summer, State Farm is down from 12% to 7% and Allstate down from 10% to 5%.

To what do we attribute this slow-down?

First, there are a certain number of people, other than customers, that will follow insurance companies; these include social media watchers, bloggers, competitors, analysts, researchers. There is a school of thought that tweeters follow tweeters and there are very few real customers involved. There is some truth in that statement but there are too many followers for that to be completely true. But remember, pretty much every competitor will follow you. One interesting illustration to this point is that AXA have grown their follower base by a steady 6 per cent per month to a respectable 671. Not bad until you realize they have yet to send a single tweet. They beat out Ameriprise (290) and Genworth (249) as the most followed silent tweeters.

Another reason is the drop in twitter activity from the industry itself. The average number of tweets across the major companies has declined from 35 to 30 per month. This does not seem a huge drop but is masked by early stage enthusiasts building their base. Eight of the top ten, by follower count have decreased their tweet rate. Conversely, seven of the bottom 10 has increased their tweet rate. USAA with a follower count at over 8500 now send on average 19 tweets a month, down from 34 in summer 2009. Some of the decreased activity might be associated with the weather or at least the season, Restrictions imposed by compliance concerns has limited many insurers to non-product related activities. Nationwide twitter activity has plummeted but they focus on NASCAR events so we may see an uptick again as the season picks up. This could apply also to other companies where golf, tennis and baseball all receive good coverage. The top tweeter activity comes from State Farm, Progressive, Liberty Mutual, Allstate and Esurance, all of whom have products in auto insurance, a segment with fewer compliance concerns.

A further reason is lack of interesting news; Twitter users are notoriously fickle. This goes to the question as to why people tweet, why do people follow an insurance company in the first place. No offense to the industry but it is all rather dull. Twitter is time consuming and while I follow, avidly, everything insurance companies tweet, it is not my weekly highlight. There really is not very much that is entertaining, engaging, or exciting. After following insurers for 9 months, it is clear that the same information distributed; is it coincidence that the insurer that recruited the highest number of followers in the past 3 months was the Aflacduck who recently pronounced that

Spring is here! If you need me, I’ll be flying a kite and high-fiving blooming flowers.

So what are the trends? Life and health insurers will remain conservative to avoid compliance concerns, they will prefer to promote philanthropic or sponsorship events, and maintain a steady growth in followers. We would not expect explosive growth. Scalability will be a limiting factor, as companies must/should review tweets in accordance with industry guidelines and risk management strategies.

Auto insurers, without many of the shackles of compliance, will adopt a more mainstream approach and look to engage customers and prospects. Twitter can become an alternative service channels and while volumes and caseload will be low, they will grow as companies examine business value. Customer engagement, measured by the Conversation Index, looks at the number of tweets delivered to a single person compared to broadcasting to all followers. To illustrate the different approach, Progressive has a conversation index of 78%, whereas USAA has 5%, many of which are sent to other USAA tweeters.

Key Findings

Leading Insurers by Follower count

USAA	8511
State Farm Insurance	5347
Aflacduck	5176
Allstate	3986
Progressive Insurance	3720

Leading Insurers by Average Monthly Tweet Activity (past 3 months)

State Farm	175
Progressive	149
Liberty Mutual	62
Allstate	55
Esurance	51

Leading Insurers for Customer Engagement (Conversation Index)

Progressive	77%
GEICO	58%
Esurance	48%
State Farm	41%
Amica	40%

Leading Insurers by average monthly follower growth over past 3 months

Aflacduck	368
Progressive	262
USAA	238
State Farm	228
Allstate	209

Leading Insurers by monthly percentage rate growth for followers (starting with more than 100 follower)

Chubb	25%
Westfield	20%
GEICO	20%
Amica	14%
Travelers	14%