LiquidHub Blog

by Jerry Smith

Social media adoption has seen an exponential growth over the past few years.  YouTube is now the second-largest search engine on the Web; 50 percent of its 300 million users visit the site at least once a week.  Facebook usage is up 40 percent over 2010, with 65 million users accessing their pages through mobile devices and 2.5 billion photos being uploaded to Facebook each month.  Nearly 96 percent of 18- to 35-year-olds in the U.S. participate in some form of social network, with one in five Americans in that age bracket using Twitter.  Finally, 78 percent of consumers trust peer recommendations, driving user-generated content accounting for 25 percent of search results for the world’s 20 largest brands.

These impressive, as well as amazing, statistics are now driving the way businesses are looking at social media.  Two years ago, you would have been hard pressed to find any large-scale corporate implementation of social media.  Today, companies like Best Buy and Jet Blue are more than leading the way; they have clearly defined how to perform at scale through transforming customer sentiment into profitable top-line revenue.

Social media is now turning into social business.  Through geographically-based push technology, businesses are looking over the next 12-18 months to Foursquare for their consumer-oriented products/services, proactively pushing real-time, instant-access sales.  With 70 percent of organizations banning access to outside social media networks, in 2012 we will see the mobile platform (smart phone, tablet) establishing its dominance as the connected mesh that keeps the social/business network together.

Social Media is more than just a trend.  What we are seeing is the emergence of stable and mature capabilities (business process and supporting technology) that are driving real, measurable business value.  It is an ideal time to start looking into social media strategies and policies, and to take advantage of the innovation and early adopter efforts that laid the ground work for Social Media 3.0.

One of the key factors in being profitable as an insurance carrier is being able to predict the future – when writing a policy, for instance, being able to anticipate what the loss experience on that business will be. To help with this, insurers are turning to predictive analytics to identify trends and apply these results to their business. Effective use of predictive analytics helps insurers price more accurately, write more profitable business, identify fraud more easily, avoid adverse selection, and manage their exposure to catastrophic events more effectively.

Perhaps the classic example of predictive analytics is the use of credit scoring in personal lines. When insurers first identified a connection between poor credit history and loss history, many began to develop scoring models based on financial history from the credit bureaus. Over time, many of those models grew to be a true “insurance score,” which weighs many factors, not just the credit history of the primary insured. As a result of success using credit scores to predict insurance risk, the use of predictive scoring has expanded and is now prevalent across virtually all of the insurance market.

Predicting the future has its challenges, though. At the outset, most insurers discover that they have real problems with data quality and that mining poor-quality data to identify trends is ineffective, at best. Many insurers also discover that they have little or no organization for their master and reference data, the data that provides context to the transactions for any application. That’s where LiquidHub comes into the picture. We help companies build a plan for more effective control of their data, ensuring its accuracy and improving the management of the valuable data assets. LiquidHub’s efforts enable companies to mine all forms of data in order to provide true information that carriers can rely on. Our Enterprise Information Management practice has worked with a number of insurers to understand their data, organize it, and use it for effective decision support. We have set up world-class data management solutions to position many carriers for a more profitable future.