Insurers are ill-prepared to face a social media revolution but are conscious that it will strike with force, according to several studies and reports.

Most reports reflect the view that social media will transform the industry but that few insurance companies are doing anything substantial about it.

A report launched in London last week, The Future of General Insurance, says 80% of the 200 insurers and brokers surveyed believe clients will use social media to choose a policy by 2016.

Only half of those surveyed expect to be part of a social media network, but they don’t expect their company to invest in it in the near future.

Perhaps some of the reluctance is due to the risk management aspect.

A survey by the Federation of European Risk Management Associations (FERMA), completed with the co-operation of the Institute of Risk Management (IRM), had 186 risk professionals responding to questions about social media and risk management.

FERMA VP Michel Dennery says companies “have to learn how to live in this new environment where information is available anywhere, where private and professional life is merging, and where the balance of authority is shifting”.

Of those surveyed, 50% cited material risk as the main social media issue, with 20% citing loss of confidential information.

They rank social media up there with non-malicious operational IT risks, theft of customer information and malicious interference with IT systems.

Half of the respondents rank their own organisational risks as firstly non-malicious IT, followed by theft of customer information and then social media.

Some 65% of the risk managers surveyed by FERMA say their company has a policy on the use of social media, with 14% saying they are implementing one.

A global survey on social media risks by Ponemon Institute, a parent organisation of the Responsible Information Management Council (RIM), questioned 4640 IT and IT security practitioners from 12 countries.

It found a gap in corporate social media security, with 63% saying that social media represents a serious business risk but only 29% saying they have adequate controls in place to manage the risk.

According to that survey, countries most likely to see social media as important for business are the UK, Germany, Hong Kong, India and Mexico. Australian organisations polled did not see social media as important.