Insurance Marketing Strategies for the New Age

Let’s admit it.

Insurance marketing is intense.

Those with a real talent for selling insurance can sell snow to an Eskimo and snowshoes to a camel.

However, success in the new age of insurance marketing requires more than door-knocking, brochures, business suits, and brazen confidence—a lot more.

Challenges in Insurance Marketing Today

Currently, the biggest challenges for an insurance agency come from the demographic and social trends affecting America and the world.

1. Millennials are taking over. Being very tech-savvy, the new generation of insurance buyers prefers digital channels over personal, face-to-face meetings. They’re also typically carrying the financial burden of outstanding student loans. Perhaps, that’s the reason they buy less insurance than any other generation.

2. Racial diversity is increasing. Forty-three percent of millennial adults are non-white. With this statistic in mind, all businesses, including insurance, need to understand how to market to diverse audiences for a maximum positive effect.

3.The American family is changing. Two-parent households are on the decline, while the percentage of Americans who have never married is at a record high. The industry is watching closely to see how this trend might affect sectors like home and life insurance.

4.Women’s roles are growing. More than 40% of households with children have mothers as the sole or primary breadwinner. Insurance agencies would do well to devise customized marketing strategies that serve women specifically.

5.Customers do not trust insurance companies. The numbers are in, and they are not good. Research shows consumers trust insurance companies less than banks and only slightly more than pharmaceutical companies. These customers also tend to switch insurance companies without warning, which makes it difficult for insurers working to regain their clients’ trust.

6. Customers do not understand insurance. Only 45% of regular customers understand terms like coinsurance, deductible, or copay, and only 40% say they feel confident choosing the right plan for their needs. As for millennials, 41% of the respondents believe the color of their car affects auto insurance rates and that their home ZIP code doesn’t. The facts are to the contrary.

What does all this mean? Insurance agencies will need to adopt brand new marketing strategies to stay relevant in the new age of insurance.

Insurance Marketing Strategies for the New Age

Insurance Marketing Strategy #1: Ensure Transparency and Trust

Thanks to social and digital media, today’s insurance buyers value openness and transparency like never before. They like to work with companies that put all of their cards on the table.

Lemonade is a new insurance agency that specifically targets the new generation of insurance buyers. As the name depicts, the company doesn’t want to sound too serious and look too important.

Who would trust such a company? As it turns out, lots of people. Lemonade insured more than 100,000 homes and earned $10 million in sales in only their second year of business after launching.

Lemonade established a transparency review blog where it regularly publishes stories of negative feedback and failures.

The goal is to improve customer services and claims handling and to let their customers know the company is aware of its weaknesses, takes them seriously, and follows through by dedicating time and resources to addressing them.

What could be more transparent than owning your mistakes?

Insurance Marketing Strategy #2: Promote Social Good

The basic idea of insurance is to help people, but most of your customers don’t think you care for them. In other words, they hate insurance companies. You need to show your audience you care for them, and society in general.

Supporting causes and promoting social good are effective strategies for demonstrating how your company gives back to the community. That’s why almost every insurance company does it.

Farmers Insurance, for example, has launched its own charity campaign named “Thank America’s Teachers.” The company donates between $2,500—$100,000 to 185 American teachers as an acknowledgment of their role in preparing students for their own and the nation’s future.

Other examples include Lemonade and Allstate. In 2018, Lemonade reports that it distributed $162,000 to 15 different charities through their initiative, Lemonade Giveback. Allstate Insurance, with its slogan “You’re In Good Hands With Allstate,” regularly publishes compelling content featuring the families they help and the causes they support.

Societal marketing campaigns humanize the brand, inculcate trust, and show your audience you’re a responsible company that cares for its customers and the community’s wellbeing.

Insurance Marketing Strategy #3: Personalize Marketing Efforts

Personalization is what 88% of consumers demand from their insurance providers.

We live in an age where we practically breathe in information. Companies have a world of data available about their customers—their age, lifestyle, interests, behavior, and much more. You can use this information to deliver highly personalized marketing messages and insurance plans to prospective customers.

Personalizing insurance marketing is not easy.

When done well, personalized approaches create lasting relationships able to withstand attacks by industry disruptors, such as digital-only operators or e-commerce players.

Staying competitive isn’t the only reason to personalize marketing. Personalization also has financial implications.

According to management consultants at McKinsey & Company, personal auto insurance carriers in the United States could earn an additional $2 billion if they retained just 10% of the $19 billion in direct premiums paid when people switch from one carrier to another every year.

Technology such as CRM and big data tools can help you track your customer’s journey, so you can reach them with the right message at the right time. Using dynamic content, you can show different messages to different visitors, depending on their stage in the buying journey.

SPIXII and other similar tools help you take insurance marketing to a personal level.

Your customers have become savvy. Anyone who shops on Amazon (or any other e-commerce website) would expect you to anticipate their needs and serve them relevant messages.

You have to meet their expectations if you want to succeed.

Insurance Marketing Strategy #4: Use Technology to Digitize Services

Right now, “insurtech” (or insurance technology) is disrupting the insurance industry just like “fintech” (financial technology)  disrupted the banking industry more than a decade ago.

Insurtechs (legacy-free, technology-led companies) are taking advantage of modern technology to provide insurance coverage to a more tech-savvy customer base—the millennials.

Investments in insurtechs grew to $2.7 billion in 2015, signaling the dawn of a new age of insurance marketing.

These new entrants use technology to personalize plans right down to the level of each mile driven for auto insurance or each calorie burned for a health plan.

The technologies range from AI and machine learning to robotics and the Internet of Things (IoT). Some of the players offer completely automated instant claim payments using your phone’s camera and a mobile app. Insurance technology is still in its infancy, but it already offers limitless opportunities for marketing.

Here’s how some of the insurtechs are using technology right now:

Onsurance is a shopping engine that offers personalized auto insurance quotes using Mojio, a proprietary tool that customers can plug into their vehicles. Mojio transmits the driver’s data to the cloud where an algorithm is used to determine the buyer’s driving habits. With this information, Onsurance then searches the internet and recommends the most suitable insurance plan.

SPIXII has created another tech innovation. To help simplify the process, SPIXII has created an insurance chatbot that insurance companies can customize and use to interact with their customers. It can recommend policies, provide quotes, help select coverage, and then also manage claims.

Cuvva, a UK-based insurtech company, allows customers to purchase pay-as-you-go car insurance by the hour, day, week, or month through their mobile phone.

Legacy  insurance companies need to do what banks did a decade ago when fintechs threatened to disrupt the finance market. Embracing insurance technology is not an option for insurance agencies in the new age. It’s a matter of survival.

Insurance Marketing Strategy #5: Use Remarketing Ads to Control CPC

“Insurance” is the most expensive keyword on Google Ads (formerly AdWords).

A click on any insurance-related keyword may cost the advertiser as much as $54! The cost may sound prohibitive, but you can’t ignore Google Ads, the world’s biggest lead-generation platform.

Remarketing is the answer.

RLSAs, or Remarketing Lists for Search Ads, allow you to target people who have already visited your website.

Remarketing ads enable you to reach people who come to your website, but leave without taking any action. For example, a person who abandons the quotation process.

With RLSAs, you can retarget such people with display ads as they visit different Google partner websites or search for an insurance-related keyword again.

Remarket ads have several things going for them. They have a higher conversion rate and lower CPC than search ads.

Also, RLSAs reach your customers when they’re potentially more ready to buy than when the first came to your website. Paying for an expensive click makes more sense at this point in their journey.

Conclusion

The emerging social and technological trends are disrupting the insurance market, inviting new players, and forcing incumbent agencies to look for and adopt new strategies.

Openness and transparency, societal marketing, and personalization are sterling marketing strategies necessary for any day and age. It’s important to stay ahead of the curve by implementing modern insurance technology to execute these strategies more efficiently and effectively.

And don’t forget the good old AdWords ads despite their formidable cost-per-click, because you can control the CPC with remarketing ads and hopefully realize a higher conversion rate and greater return on your investment.

If you need the services of an insurance marketing consultant to set up remarketing ads or help your company execute the rest of the strategies we just discussed— you know who to call!

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