By: Vineet Saxena
A recent survey conducted by Life Insurance and Market Research Association (LIMRA) shows that only two-thirds of Generation Y, called millennials, have any kind of life insurance. And as per the survey, the main reasons behind the lack of awareness are among millennials that about the latest insurance product development and this is market development. It is a bitter truth that selling insurance is one of the most challenging tasks in the world, in my opinion, it’s just below to climbing Mount Everest. Beth Comstock very rightly said that you can’t sell anything if you can’t tell anything. So, telling aptly about how the insurance will change the life of the customers and solve their problems, is the crucial services of the insurance company. Therefore, insurance marketing becomes one of the utmost importance. There is no doubt that traditional ways of insurance marketing like- door knocking, brochures, and old television ads are not going to work anymore now because of recent challenges coming from demographic and social trends. For example,
First, this generation is entering the workforce with more challenges as compared to the older generation. The millennials that are entering with a significant amount of debt like the education loans, home loans, etc. Secondly, they are also more tech-friendly. They prefer mainly digital channels, and less opt for face to face meetings. Third, the traditional milestones which are used to create the need for the insurance timely like marriage, when having children, and purchasing the home, are mainly being delayed. Next, there is generally a visible shift in the income and in the lifestyle of millennials. Last finally, according to some of the researches the trust all over the insurance company is very less and even lesser than a bank. All of this now posing the challenges for the insurance marketing. Unquestionably, there are so many opportunities available for the insurance companies and that’s why they are evolving their marketing strategies. There are following strategies which the insurance company can use:
Assure Transparency and Build Trust – The insurance business is truly based on relationships and strong trust. Companies are building trust among the customers through social media and digital media. Let’s, For example, take Lemonade Insurance Company that significantly uses these all-new means of media. Its strong thrust on openness and trust has enabled it to insure more than 100,000 homes and earned $10 million in sales in just the second year of its operation. This company has a special transparency blog where it publishes all its stories of negative feedbacks and failures. The aim is simple- improving customer services and make aware customers that the company knows its weak areas and working on it to become better & better.
Popularize Societal Good- The best marketing strategy ever is- CARE. The main motive of this insurance is to help the people in a tough time. By supporting the societal good, the company can signify how it also gives back to the community. So what can be a better example of this other than the Farmers Insurance Company, which has launched its charity campaign namely ‘Thank America’s Teachers’. In this campaign, the company donated charity money to the teachers as a recognition for their crucial role in preparing the students for the nation-building. Another example is of the Lemonade which is reported in 2018 that it has distributed $ 1, 62,000 to 15 different countries through its campaign named ‘Lemonade Giveback’. The societal marketing helps in inculcating trust and show your customers that you are a company that cares for its community and its well-being.
Endeavor Personalized Marketing- As per 2019 Global Financial Services Consumers Study of Accenture 88% of insurance, consumers demand more personalization from providers. Hence, personalized marketing is the future of the company. In this, the company reaches customers with targeted messaging, offers, and pricing. The availability of analytical tools, customer data, and technology helps the company to run hundreds of personalized campaigns to improve the selling, cross-selling, and return on investment. Further, personalized approaches help the company to create a lasting relationship between them and the customer and they fight with competitors. As per the Mckinsey & Company reports, personal auto insurance carriers in the USA country could earn an additional of $ 2 billion if they retained just only 10% of the $ 19 billion in the direct premium paid when people switch from the one carrier to another on every year. The different tools like SPIXII, CRM, and big data can help a company to design a marketing strategy up to a personal level.
Embrace Technology- The new disruptor in the insurance industry is Insuretech just like Fintech in the banking industry. These tech-led companies are cashing the benefits of modern technology to cover the tech-friendly customer base- the millennials. As per the data from the Fintech Global database the annual investment in Insuretech has doubled. In the year 2019, the investment in the Insuretech company has exceeded $ 1.2 billion. The use of Artificial Intelligence, Machine Learning, robotics and the Internet of Things is in trend in the insurance industry. There are many examples of it.
- Digit Insurance Company, one of the fastest-growing general insurance companies in India works on the latest technology like microservice-based architecture, advanced core system, machine learning, and infrastructure being 100% on the cloud. Nearly 85 percent of the claims received are approved within 24 hours.
- Cuvva a UK based insuretech company provides innovative insurance product that is Pay-As-You-Go car insurance by the hour, day, week, or month through mobile phone.
- Insurance is a shopping engine that provides personalized auto insurance quotes. For this, it uses a tool Mojio. This can be plugged into the driver’s vehicle to derive data. Later this data is used to analyze the driver’s driving habits by using a unique algorithm. Then Insurance searches the internet and suggests a highly suitable insurance plan.
SPXII an insuretech startup has created insurance chatbots that interact with the customer. The other insurance companies can customize it accordingly. It suggests policies, provide quotes, and help in selecting the coverage and also in managing the claims.
Remarketing- Insurance ads are the most expensive ones. If after showing this advertisement, the customer usually visits your company website and leaves it without taking any action, it really costs a lot to a company. Remarketing is one of the solutions, which actually helps the company to reach people who come to the website but depart without taking any action. With Remarketing ads, the company can target such people with display ads. These ads are having a higher conversion rate and a very lower cost per customer. In brief, these insurance companies can’t escape from the tough challenges, hence, these companies need to continuously evolve their marketing strategies. The aim of these should be to make insurance a basic need of people just like food, shelter, and clothing. The personalized marketing, societal marketing and remarketing are outstanding marketing ideas. By using these, the companies can capture many opportunities and can withstand the attacks of competitors.
“The Good marketing makes the company looks smart. And Great marketing makes the customer feel smart.”Joe Chernov