For insurance brands, it was the year of personalized customer engagement.
Many of the major US property and casualty carriers, and some life insurers, started to organize their big data to provide a 360-consumer view. European companies worked to simplify and speed up their systems to respond in real time and facilitate customer centricity.
Traditionally, only two transactions have connected insurers with their customers –
closing a sale and processing a claim. Neither event produced the kind of relationships that can pay off over time, building a base of loyal customers with continuous and changing needs for a range of products.
There’s often been a mismatch between the competencies that would best serve customers – speed, ease of use and innovation – and the legacy baggage of insurers –disaggregated big data, secure and complicated systems, siloed organizations and businesses designed to push products rather than retain customers.
Although tension sometimes remains between the priorities of the risk managers and those responsible for cultivating customer relationships, closer coordination exists. Recent initiatives haven’t eliminated organizational siloes, but they’ve funneled them through new functions responsible for the customer experience. State Farm created a company-wide taskforce to reorient around the customer. These other trends also unfolded:
Property and casualty insurers spent heavily on advertising to enter new markets and grow share.
Brands looked at ways to expand their direct business while maintaining their agent networks.
The industry experienced rising concern about protecting the personal information of its customers.
Eroded trust and demographics drive change
Several factors drove the customer centric initiatives. First, especially during the financial crisis, carriers struggled with customer retention and recognized the importance of developing a customer relationship beyond the point of sale. Insurers still struggle to rebuild trust eroded during the crisis.
The second factor is demographic. Insurers want to reach younger consumers and retain them over the course of a lifetime. Like earlier generations, Millennials consider insurance only when a life need arises. But with marriage, children and homeownership happening later, insurance opportunity points are postponed.
The challenge impacts both US companies, which have traditionally presented their brands with more emotion, and European-based insurers with consumer and enterprise businesses, whose more steady, institutional approach often worked well during the recession.
The German-based Allianz expanded its business and reported strong results, driven by property and casualty, with brand value rising 48 percent. AXA, headquartered in France, improved earning substantially, based on efficiencies gained in mature markets and expansion into fast growing markets. The brand has over 100 million customers in 56 countries, a presence that helps recruit additional customers, talent and partners, particularly in new markets. AXA’s brand value increased 44 percent.
Reaching Millennial consumers
Even life insurers, which lag property and casualty companies in the use of social media, are looking at ways to reach Millennials. They’re introducing easy-to-buy products with low benefit amounts. MetLife offers an entry-level life insurance product that’s packaged in a box and priced for retail sale off a shelf or peg hook.
Allstate acquired Esurance, an online direct-to-consumer business, in 2013. Esurance purchased TV ad space immediately after the Super Bowl. A Millennial celebrity spokesperson explained that the post-game placement saved $1.5 million, or 30 percent, the brand’s typical discount. He invited viewers to tweet for a chance to win this jackpot. Over five million people responded, connecting Esurance to a youthful audience less accessible to its parent brand.
AXA announced a partnership with Facebook to develop social and mobile marketing initiatives. In the UK, where direct online sales dominate auto insurance, the largest auto insurance aggregators are relatively young brands that were created by major traditional brands aiming to reach new audiences and avoid channel conflict with their agent networks.
More disruption expected
More market disruption is on the horizon. Google introduced an insurance price comparison site in the UK. The brand offers a potentially powerful proposition because of the vast amount of data Google collects and analyzes, including photos of homes, which can be relevant for insurance assessments.
And Google is not the only technology company entering the category. The Chinese insurance company Ping An partnered with ecommerce giant Alibaba and with Tencent, the social network, to launch an online insurance company called Zhong An. In an effort to grow customer share of life, and sell direct, retailers including Costco and Walmart offer insurance products.
In another potentially disruptive move, more companies provided discounts to customers who agreed to participate in their telematics programs, where a device installed in a car records driving habits. By identifying safe and unsafe drivers, telematics potentially can revolutionize the car insurance pricing model by aligning premiums more closely with driving habits.
Mobile, social media and sponsorships
Direct mail, the traditional insurer marketing tool, doesn’t resonate with customers looking for more personalized communication. Many advertisers have produced clever multichannel advertising. The irreverence of Geico’s gecko lizard spokesperson cuts against the expected solemnity of car insurance messaging.
Property and casualty brands have developed apps to quote insurance prices, pay bills and use GPS to locate accident locations and obtain roadside help. A traveler’s smartphone app helps users document car accident reports and begin filing a claim.
Allianz is a major sponsor of Formula One racing, which ties into its safe driving initiatives. The brand is attempting to reach its over 83 million customers in ways that are relevant to their lives. It has a weather app that warns people when bad weather could damage property. Zurich sponsors an app that locates the fitness courses that the brand sponsors and provides exercise advice.
Fast growing markets.
The leading global players, like AXA, Allianz and Zurich, continued expanding in fast-growing markets. AXA acquired companies in China and Columbia. AIA enjoyed strong financial results based on the increasing life insurance needs in its 17 Asia-Pacific markets. It introduced new brand positioning as “The Real Life Company.”
The global brands are expanding their presence in China, an enormous market where the insurance category is dominated by State Owned Enterprises (SOEs), such as China Life, China Pacific (CPIC) and Ping An, which is diversifying into a full service financial services company.
China’s slower rate of economic growth impacted both premium and investment income. The major insurers increased their online presence and targeted the wealth management needs of the expanding middle class. Regulatory changes are opening the market to increased competition.
Most insurance company effort goes into the claims processing, making sure that process is handled well because it has a great influence on retention. Today, companies are trying to build the dialogue with customers outside of the claims process. They’re trying to build awareness online and in other media in ways that are fun and engaging so that the customer is more likely to consider the brand for insurance needs. And beyond awareness, companies also want to be able to engage more directly with customers, share more information and talk with customers about insurance-related topics.
Senior Vice President
Insurance Vertical Practice Lead
There’s a once-a-year cycle of negativity. The consumer gets an annual letter that says give me more money because your rate has gone up. Brands are trying to find as many relevant ways as possible to engage with the customers and provide a useful dialogue with them, and also provide transparent, useful help or interesting content. Mobile is an opportunity to demonstrate usefulness. Mobile apps can tell you when a storm is about to hit so you need to put your convertible safely away, or connectivity systems built into the car can call for help in the case of an accident. Simplification of the process is another benefit of mobile from getting faster quotes to faster claim processes - that even include uploading a photo of the damage and getting instant approval to repair.
Global Brand Director