Would You Accept Premium Payments Through Facebook's App?

Many people interact with their social networks through their smartphone. Are insurers prepared to adjust to that reality?

We're reporting today on how Northwestern Mutual is expanding its agents' social capabilities, just the latest in a long line of insurers looking to leverage social media.

But as insurers and their distribution partners look to get on social media, the target is moving. As of last year, a third of Facebook's total users interacted with the site using their mobile phone. I can't speak for everyone, but I use Facebook almost exclusively from my phone at this point — I rarely if ever log into it from my browser anymore.

What does this have to do with insurance? Facebook is trying to soothe nervous telecommunications operators (who see the social network encroaching on their text messaging services) by offering them revenue from transactions conducted through Facebook.

So, let's connect the dots: As more insurers like Northwestern Mutual connect with prospects on Facebook... and more people use Facebook through their mobile phones.... and Facebook becomes more of a commerce platform... will insurers be willing to accept premium payments through Facebook's app, even if charged a fee?

Alternative payment methods are gaining steam in insurance — see CURE's text-to-pay offering — but security and privacy concerns around social aren't going away. Yet there's plenty of opportunity to differentiate on a service basis for insurers who are willing to collect payments where their policyholders want to make them. The question becomes: Who takes on the extra charge?

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio