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Insurance: Insurers push appeal to younger consumers

Insurance

Insurers push appeal to younger consumers

Cultural shifts open new opportunities

Insurance brands implemented new programs and communications to target Millennials and other first-time customers. They also pursued new business opportunities to meet needs for financial protection resulting from the sharing and gig economies. The health and wellness trend touched health insurers, which are included in the BrandZ™ Global ranking for the first time.

Fortified by improved data analytics, many insurers focused on building customer lifetime value, although in some segments of the business, like car and home insurance products, driving the annual renewal rates continued to be a priority. Insurers focused on improving the brand experience, particularly for filing a claim.

To attract Millennials, Allstate, State Farm, and Nationwide were among brands offering performance discounts that, for example, linked the premium for auto insurance to driving habits as recorded by a smartphone app.

In a collaboration with Apple, the US healthcare insurer Aetna launched an app called Attain that collects data on iPhones or Apple Watches. An incentive program enables users to earn an Apple Watch. Similarly, a UK health insurer named Vitality provided a discounted Apple Watch to subscribers and tied premium rates to personal fitness and health habits recorded on the insured’s apps.

Younger people are more open to these approaches, which integrates insurance into their daily routine. With messaging focused on the changing needs of young families, more direct-to-consumer brands entered the category, including startups such as Ladder and Ethos. These online products emphasized simplicity, price, and the absence of high-pressure sales.

New businesses

Allstate’s SquareTrade business, which insures computers, mobile devices, and appliances acquired several companies that provide technical support and repair services for these products. To provide identity and data protection, Allstate also acquired a company named InfoArmor.

Allstate announced a plan to unify its businesses, phasing out the Esurance brand that it purchased about a decade ago to build its e-commerce presence. The move is intended to simplify the customer experience while cutting costs and leveraging the Allstate brand to provide a “circle of protection” encompassing property, liability and life insurance along with identity protection.

MetLife entered the pet insurance market with the acquisition of PetFirst Healthcare, which markets its policies D2C as well as through animal welfare agencies. Nationwide also provides pet insurance.

 

The clearest example of stretching an insurance brand is Ping An, No. 1 in the BrandZ™ Insurance Top 10. China’s largest insurer, Ping An has expanded into a financial services conglomerate that operates in five core service areas: financial, health care, real estate, auto, and smart city. Ping An’s financial businesses continued to grow and benefited from cross selling.

Also driving Ping An’s growth were the relatively low penetration of the insurance category in China, and the increase in insurable assets owned by members of China’s middle class. Robust economic growth in Asia also helped AIA, which is based in Hong Kong.

Emotion and salience

Many insurance brands adopted a more emotive rather than transactional approach in their communications. Even in the UK, a market known for insurance price aggregators, brands such as Compare-the-Market, Money Supermarket, and Confused.com, part of the Admiral Group, saw the need to be more emotive and consumer centric.

Brands became more consultative to help lessen the anxiety of financial decision-making. Admiral, which began as a car insurer, has added homeowners’ insurance, part of a more holistic focus on individual customers and their range of insurance needs.

Insurance marketing in the US remained mostly about advertising to build salience. Allstate, Geico, and State Farm score high in the BrandZ™ measurement of salience, meaning that the brands come easily to mind the time of purchase. Geico also scores well in being differentiated as a brand, according to BrandZ™ analysis.

For over 20 years, Geico has driven awareness with an engaging cartoon lizard that delivers amusing commentary in Cockney accent, gaining the audience’s attention before a voiceover delivers the punchline: “15 minutes could save you 15 percent or more.”

With around $1.5 billion devoted to advertising, Geico is American’s No. 1 brand in media spending, according to Kantar. Progressive, the No. 3 brand in ad spending, emphasizes salience and price with ads that feature a personable character named Flo and end with a voiceover promising, “The best place to find a great deal.”

To reach a younger audience and compete against Geico and Progressive, which rely on humor and memorable characters, Allstate created a character named Mayhem to personify events that can unexpectedly disrupt life and require insurance. To reach a more traditional audience, Allstate relies on the reassuring presence of a veteran actor to deliver the brand’s purposeful question, “Are you in good hands?”

Health and wellness

The health insurers, such as United Healthcare, Aetna, and Blue Cross Blue Shield, also advertised to build brand awareness and they expanded their digital presence. And they relied on agents or independent brokers because the audience for these US brands usually needs consultative assistance to select the most appropriate Medicare Advantage plan.

These plans supplement the amount of medical coverage Americans receive as part of their social security entitlement. To differentiate with added benefits and services, health insurance brands often partner with service providers such as Silver Sneakers, which offers gym programs. These providers potentially lower insurer expenses with programs that promote health and potentially reduce claims.

Humana, a major US health insurer, expanded into total protection rather than total care. In part to lower the cost of in-home care, Humana acquired a minority stake in Kindred At Home, a home care and hospice services provider.

Covid-19 Impact

Insurers expect costly aftermath

Insurers braced for extensive payouts related to the Covid-19 pandemic, including claims for cancelled events. Life insurance brands predicted larger payouts because of the devastating mortality rate of Covid-19. Disputes over business disruption claims were expected. At the same time, property and casualty insurers including Geico, Allstate, and State Farm, discounted car insurance premiums because quarantined policy holders drove less. Share prices of major insurance brands, including Allianz and Axa, declined because rising payouts and declining investment returns from lower interest rates weakened share prices. In the US, the pandemic surge in hospitalizations should intensify the ongoing debate about universal healthcare.

Brand Building Action Points

  1. Shift the mindset

Shift the mindset from insurance to protection. Insurance connotes fixing things—cars or homes, for example—when they break. Protection implies taking care of individuals or families, so they have less anxiety when facing inevitable problems. This approach is less about annual renewals and more about having a customer for life.

  1. Humanize the brand

Communicate about how general insurance protects the individual rather than the product—the car or home—or about how health insurance is as much about promoting good health as it is about covering the expenses of illness.

  1. Unify the vision

Operate under a unifying vision of serving the customer throughout a lifetime of insurance needs. Link the customer data across all parts of the organization to enable the collaboration required to achieve this vision.

  1. Update the products and message

Adjust the products and add new ones to meet the expectations of new, younger potential consumers, whose insurance needs may differ from those of legacy customers. Trust and reliability are not old school, but they need to be communicated in new relevant ways.

  1. Message early

In instances like health insurance, where there may be a calendar-based sign-up period, spreading messaging over many months will be more effective than trying to drive new business and renewals with a communication schedule that begins only a month or two before the sign-up deadline. It is better to begin messaging early because people consider their insurance decisions at different times, and it is useful to preempt the communication cluttering that happens as the sign-up deadline nears.

  1. Improve the experience

After a customer buys an insurance policy, the customer’s next significant experience with the insurance brand often is filing a claim. Especially because there are limited touchpoints, the claim experience is a critical opportunity to surpass expectations and potentially receive positive comments about the brand through word-of-mouth and social media postings.