Social media in the insurance industry has advanced beyond the experimental phase and reached a tipping point. The early appeal of Facebook and Twitter as a tool for virtual socialites and an experimental platform for company mavericks has proven valueable and important as a presence in these realms. Lessons learned include the surprising appeal across generations as well as the amazing market reach. That said, reach can be a double-edged sword.

Companies know all too well that proclamations of poor service are often “twittered” or blogged to thousands in real time, and that customer-created videos of poor service experiences sometimes go viral on YouTube. An excellent example is David Carroll’s infamous “United Breaks Guitars” video, posted on YouTube in retaliation for the airline damaging his Taylor guitar. Shortly after, The Times of London reported that “…within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines’ stock price to suffer a mid-flight stall, and it plunged by 10%, costing shareholders $180 million.”

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