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Entering the blogosphere: agents and actuaries are writing insurance's first blogs.

November 1, 2005

Blogging has become an essential ingredient in independent agent Andy Kosick's marketing to potential clients. Kosick, an agent with Eagle Harbor Insurance in Bainbridge Island, Wash., began his blog earlier this year as a search engine optimization tool that places his company as a top hit when attorneys search for professional liability information or coverage via the Internet. Since then the number of readers visiting his blog has grown significantly, and he's finding his blog to be an excellent educational tool that's as "user-friendly" as e-mail" and allows him to update information daily.

Blogging, once the domain of teenagers and celebrities, is breaking into the business mainstream, seized by some industries as a means to reach larger audiences and exchange ideas. Among insurance professionals, agents and actuaries are in the blogging vanguard, using the new tool to pass along information, educate clients and attract potential customers. Carriers, on the other hand, have been slower to blog, some experts say, because they fear the compliance and legal pitfalls that may stem from use of these virtual diaries.

A Closer Look

Weblogs, commonly known today as blogs, are Web applications that contain periodic, reverse chronologically ordered posts on a common Web page, according to Wikipedia. The term "Weblog" was coined by Jorn Barger in 1997, soon after blogging made its way onto the Internet. The first Weblog was built by Tim Berners-Lee at CERN, the European particle physics laboratory, and has since taken on many new forms. Today, blogs come in all shapes and sizes for a variety of purposes, including serving as education tools, town forums, personal diaries and real-time updates on news events.

While their content may range from well-researched facts to simple, off-the-cuff messages, the power of blogs is sometimes underestimated. According to an article in the Columbia Journalism Review, bloggers have been credited with helping to topple Sen. Trent Lott, R-Miss., and former New York Times editor Howell Raines with inflaming debate over the Iraq war, and helping boost Howard Dean during his 2004 run for president.

Blogs are spreading at an amazing pace. Technorati, a real-time search engine that tracks the blogosphere--the collective term encompassing all Weblogs or blogs as a community or social network--said a new blog is created about every second, with more than 80,000 blogs created daily. At the end of July, Technorati tracked more than 14.2 million Weblogs and more than 1.3 billion links--twice the number reported five months earlier.

Insurance Bloggers

Some carriers said they don't blog or haven't yet explored the possibility. "It makes perfect sense that there's generally no activity among carriers because every Web page a carrier puts out has to go through compliance, the legal department, marketing, etc., so the idea of a real-time information discussion page is a worst nightmare for a highly regulated industry," said Chad Hersh, a senior analyst in Celent's insurance practice.

Some in the industry, however, are seeing a different scenario among agents. Hersh said he's seen a slow but steady growth in the use of blogs among independent agents and comparison sites, particularly for educational purposes. "Daily or weekly they'll throw out topics for discussion, such as 'why might you need more life insurance than you think?' Blogs are a nice way for independent agents and for larger audiences to share ideas and discuss thoughts in an informal way," he said.

Agents are among the many participants in The American College's blog--The Wealth Channel. The college, an independent, accredited nonprofit educational institution for graduate and professional education in financial services, recently set up a blog for its students, alumni, financial professionals, others in the industry and the public as a place for bloggers to ask questions, share information and ideas, and communicate directly with the college's president and chief executive officer, Dr. Larry Barton.

"In today's litigious environment, companies have to be very careful about what they communicate. Even the smallest misstatement could result in a potential lawsuit. That's why insurance has become one of the most internally and externally regulated industries, next to health care," said Barton. "But the problem is that agents are a very expressive group who tend to be very eloquent and have ideas that need to be shared. Many agents often can't share ideas externally without the approval of company attorneys or their compliance departments. We thought it would be wonderful if there was a town hall where they could share ideas--not just criticisms--but ideas as opportunities."

Several insurance-related organizations also have made the leap into the blogosphere. Tom Lynch, president and CEO of consulting firm Lynch Ryan, said its Weblog, Workers Comp Insider, was the genesis for insurance and business blogs. Today, the blog has grown to more than 10,000 monthly readers and spans a variety of workers' comp-related topics for what Lynch calls all "factions" of the workers' comp process (such as employers, insurers, lawyers, unions, physicians).

Another addition to the blogosphere is www.actuary.net.The blog, pioneered and run by Claude Penland, a property/casualty actuary with actuarial recruitment organization D.W. Simpson & Co., is an information source for actuaries, recruiters, professors, actuarial students and others in the industry. Blogs posted on the site include up-to-date recruitment information, news, press releases and a variety of other information.

Recently, Euclid Managers LLC, an underwriting manager and claims administrator, also set up a blog to attract more clients. "As a smaller company, it's a great and inexpensive way to build greater awareness," said Marcia Jenson, assistant vice president and marketing director for the Kansas City, Mo.-based company. She said the blog acts as a library, complete with nonpromotional information for its agents and brokers to help them better serve their clients. Content includes recent case law, coverage analysis, sample claims and risk management techniques and ideas, Jenson said.

Earlier this year, IndividualHealthInsurance.com announced that it has become an official member of the AnswerBlogs Network--a service that provides consumers with a source for blogs that offer detailed information on a variety of topics. The IndividualHealthInsurance.com blog offers news on individual health accounts, focused largely on the emergence of health savings accounts as an option for individuals looking to protect themselves and their families.

The Buzz About Blogging

Information and idea sharing aren't the only advantages many bloggers find. Blogging experts say the communication tool is a good brand-building tool, niche builder and search engine marketing tool.

"Blogs are made in the shade for search engines," said Paul Chaney, president of Radiant Marketing Group, a Tupelo, Miss.-based business blog consulting firm. "The platform lends itself well to search engines because each blog post is its own HTML page and is written in a way amenable for search engines, particularly Google." He said blogs are generally returned early on in search engine keyword searches, mixed in with more traditional Web sites.

Blogs also help set an organization apart from its competitors, said Chaney."They give companies a way to tell their story, and as one person once put it: It's like an ongoing tour with a guide you get to know."

In addition, blogs allow information to be disseminated in real time. "The demand for information today is at least daily, if not faster, and blogs are more efficient than a traditional newsletter, are less formal and more accessible, and allow a variety of people with different agendas and viewpoints to respond," said Joe Paduda, principal of consulting firm Health Strategy Associates and operator of Managed Care Matters, a blog centered on various managed care issues such as consumer-directed health plans and Medicare Part D.

But for many, the ability to reach larger audiences and connect with customers is one of the biggest boons for business blogs. A recent Pew Internet and American Life Project survey found that 16% of U.S. adults, or one in six people, are blog readers. The project is a nonpartisan, nonprofit initiative of the Pew Research Center that examines the social impact of the Internet. "The minute you hit the publish button, the information is out there, and it's a great way to speak openly and honestly with anyone," said Chaney.

"Judging from the rapid popularity the site has enjoyed since the August 2004 launch, I think the main advantage is that actuaries and other industry professionals find it really useful to know in a few minutes what takes me at least an hour a day to aggregate," said Penland about his www.actuary.net blog. "If Dr. Grace at RiskProf [a blog that discusses liability law and economics], Eliot Spitzer or the actuaries at www.actuarialoutpost.com have something particularly interesting to say to actuaries, for instance, visitors to the blog will know it."

Chaney believes blogs are now "reaching a tipping point with companies," and he said the blogging landscape is beginning to widen in terms of its applications. "So, businesses are beginning to embrace it and less people are scratching their heads as to what blogs are," Chaney said.

Greater awareness of blogs among the public is opening the doors for increased usage. For example, The American College recently set up a portal on its blog to allow consumers to locate a local agent in their area.

Throwing Caution to the Wind

But with their many upsides, there are some challenges attached to blogs.

"It takes a bit of courage to be willing to put your information out there," said Radiant Marketing Group's Chaney. "If companies do blogging as blogging has been traditionally done, then you're speaking very personally in a shoot-from-the-hip sort of way. Editorial content isn't sanitized, and if you're using an interactive blog platform, you're opening yourself up to criticism."

One of the biggest concerns lingering in companies' minds about blogs is the potential for liability. One example of a legal pitfall might be if someone expresses something negative on a blog that's published on a company server. "There's the potential risk that the company could be held liable," said Susan Barnes, associate professor in the department of communication and associate director of the Lab for Social Computing at Rochester Institute of Technology. In addition, she said some people's use of blogs as a sounding board to gripe or complain about something has often landed them in trouble. "That's not the proper use of blogs. A big problem with the Internet is that people don't understand that they may be home in their pajamas typing into a computer, but their words are being broadcast globally," she said.

Brad Gow, vice president of professional risk for Ace USA, identified several professional liability exposures that companies could face in having employees participate in blogs. These include defamation and privacy torts, intellectual property infringement and trade liability. In addition, there are some directors and officers exposures, including securities fraud, material misstatements about a company or product, gun jumping and selective disclosure, he said.

But professional liability coverage may not always be the answer. "In many cases, blogging is an activity being done more for marketing purposes. Depending on how broad a company's professional liability is, it may or may not pick it up. Professional liability coverage is defined as XYZ services provided for a fee, and that would not cover blogging," said Gow.

Robert Hammesfahr, a member of law firm Cozen O'Connor, said errors and omissions coverage also may come in handy in some instances for companies sued over blogs. The coverage may help protect in such situations as an executive who sends out an errant blog, an individual who attaches an article to a blog that they didn't have a right to use on a copyright basis, or someone who portrays a third-party in a false light. "Companies are increasingly moving to this coverage, with about one in every four companies now buying technology E&O coverage," he said. Individual bloggers, on the other hand, may not have coverage unless their homeowners policy provides coverage, he added.

"But it's still unclear exactly what liability there really is under blogs," since there's been little case law around blogs at this point, said Hammesfahr. "The legal standards basically say this is First Amendment speech, and it's pretty broad in regard to having a right to express a view about another person absent defamatory or slanderous comments. No one can stop a person from going into a shopping mall and exercising their First Amendment right to free speech. This is just a different way of shouting."

Covering the Possibilities

What then can companies do to protect themselves? "It's important that they set up clear guidelines, such as blogging policies for employees, detailing what content should be focused on and what can and cannot be discussed in a blog," said Gow. "On a blog, it's just a matter of establishing general terms of use. Posting disclaimers on a site and doing everything they can to limit liability up front is key, and blogs need to be monitored by a member of a company's legal team." If anything looks potentially defamatory, he said, the blog should be taken down immediately.

Some recent highly publicize, cases demonstrate that blogging can have costly results for bloggers. In October 2004, a Delta Air Lines flight attendant was fired for what her supervisor called a misuse of uniform. The employee posted photos of herself in uniform on her personal biog. In another instance, an employee at the Durham, N.C., Herald-Sun lost her job because of an entry on her personal Weblog in which she criticized her job--even though her post didn't name her company, the writer, or co-workers or bosses.

"Carriers need to keep a close eye on blogs, including those put out by agents and other related entities," said Celent's Hersh. "Who knows what an independent agent or captive agent might be saying that a compliance officer might want to see. Carriers are so careful to check ads placed by agents and to provide them with templates for those kinds of things ... now that there's a worldwide publishing capability at anyone's fingertips that's completely free, carriers have to be very careful about what's being said," he added.

What's Next

Many expect the take-up for blogs to remain slow--if not almost nonexistent--among carriers. But for agents, some foresee continued growth of blogs as an educational forum and a way to exchange information and ideas. "I think there'll be some pretty broadly expanded uses by independent agents in particular because it's a great way to educate clients without spending additional face-to-face time with them, in addition to a great way of improving their ranking on a search engine," said Celent's Hersh. "I think it will be interesting to see how well independent agents take advantage of this, particularly given that they typically have been much savvier about technology than they've been given credit for by carriers."

Chaney of Radiant Marketing Group sees blogs evolving into another phase. "We're now past the revolutionary stage. Some people groan at that because blogging's been such a novelty the past couple of years and is now a more mainstream communication tool." He said some of the "newness" has worn off, and people are now accepting blogging as another way to market a business and communicate with consumers. Longer term, he believes blogs will become more invisible. "Eventually we'll see it simply be considered the sum of its technical parts--a content management system that has lots of applications and is easy to use." Chaney also said it won't be long before blogging becomes as commonplace as e-mail in business use and marketing strategies. "Then we'll have to wait and see what the next big thing will be to come down the pike," he said.

Key Points

* A new blog is created about every second, with more than 80,000 blogs created daily.

* Blogs are used to exchange information and ideas, in addition to being good search engine marketing devices, brand-building devices and niche builders.

* Companies whose employees participate in blogs could face various professional liability exposures.

* Some insurers have been reluctant to use blogs because of compliance and liability concerns.

A Word About Blogs

Bloggers have a language all their own. Some common blogging terms include:

Biz Blogs: Blogs writing about business issues or increasingly those run and maintained by a business as part of its day-to-day operations.

Bleg:To use one's blog to beg for assistance.

Blog:A contraction ofWeblog, a form of online writing characterized in format by a single column of text entries in reverse chronological order with the ability to link to individual articles.

Blogger:A person who owns or writes for a Weblog.

Blogopotamus:A very long blog article.

Blogosphere:The totality of blogs; blogs as a community; blogs as a social network.

Edu-blog:An education-oriented biog.

Flame:To make a hostile intemperate remark, usually of a personal nature.

Journal blog:A personal diary-like biog.

K Log: Usually an internal blog, such as on an intranet or not visible to the general public, used as highly effective knowledge management systems and/or internal company communication systems.

Ping:The alert in the TrackBack system that notifies the original writer of a blog post when someone else writes an entry concerning the original post.

TrackBack:A system that allows a blogger to see who has seen the original post and has written another entry concerning it.

Vog:A blog used to display various forms of video images.

Wiki:A type of collaborative online software that allows readers to add content on a subject, which also can be edited by others.

Sources: Samizdata.net, Wikipedia

Businesses Blog to:

* Share information and ideas

* Disseminate information in real time

* Reach large audiences

* Connect with customers

* Build brands

Learn More

Ace Group

A.M. Best # 85875

Distribution: Commercial, reinsurance brokers

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Title Annotation:Blogs
Author:Chordas, Lori
Publication:Best's Review
Article Type:Column
Geographic Code:1USA
Date:Nov 1, 2005
Words:2972
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