Many client and agency teams are currently working day and night crafting their 2021 brand plans. In a more normal year (remember those?), the process for data-driven marketers would start with a formal review of FY20 brand and channel performance in order to determine what to do, i.e., decide which initiatives should be continued, stopped or re-imagined.
But this year has been unlike any other, throwing a wrench into typical testing strategies and learning agendas that would typically drive future focuses and priorities. P&C and life insurance companies have been uniquely impacted by COVID-19 with everything from an unprecedent reduction in driving miles to the inability to have in-person medical exams to bind a life insurance policy. Insurers have been quick to respond by earmarking millions of dollars to be returned to auto insurance consumers and identifying new digital-only ways to bind life insurance policies, but these solutions have been sometimes met with increased shopping habits and shaky markets making new life insurance polices even more risky.
Brands that take a longer view and invest in customer relationships, build differentiated experiences, nurture brand loyalty by eliminating friction points and deliver real value will see greater overall success. And these elements are shifting to the digital space rapidly, emphasizing the need for brands to invest in their digital infrastructure, gain a better understanding of digital metrics, and differentiate customer strategy from what may have been successful prior to the environment we now find ourselves in.
All this change will force smart marketers to push beyond the boundaries of their tried and true playbooks, embrace new opportunities, and capitalize on newly developed consumer interests.
Listed below are observations of the insurance industry gleaned from recent reported stories.
P&C insurers' performance declines in the first-half of 2020 amidst pandemic
Telematics and vehicle build data – the next frontier for auto claims
COVID-19 speeds up the modernizing of the life insurance industry
How the auto insurance industry gave away billions and still left customers unsatisfied
Dentsu Pulse Survey
Dentsu Aegis (Merkle’s parent company) has been publishing a recurring study on consumer sentiment during the COVID-19 pandemic. Some observations from the September 17 Dentsu Navigator report are highlighted below.
Consumer concern over other national issues in addition to the health and economic crisis stemming from COVID-19 is growing. As November nears, the US Presidential election is a top issue as well as social unrest and racial inequality as police brutality against Black Americans continues to occur and make national news
For months now consumers have told us they are paying more and more attention to brand responses to COVID-19. Now, that has leveled off, with the number of respondents paying more attention decreasing by 10 points while those paying the same amount of attention against a higher baseline has increased by 13 points.
While more engaged in the US political landscape overall, most American consumers say they pay attention to brand’s political stances and that they are especially paying more attention during an election year.
Boomers are significantly less likely than other generations to be paying attention to the political stances of the brands they purchase. Interestingly, it seems that engagement with US politics does not directly correlate with attention paid to brands’ political stances.
TransUnion 2020 Insurance Shopping Annual Report: Trends, Insights and Predictions
Auto insurance shopping had been trending higher year-over-year (YoY) through the first two months of 2020, driven by increased vehicle purchases, more and easier ways to shop, and record insurance industry advertising spending. However, the global coronavirus pandemic quickly cooled off the insurance market and shopping rates dropped as much as 14% YoY in the early weeks of the crisis.
Since then, shopping has rebounded and is now higher than 2019 levels. A closer look at the data reveals how the shopping landscape has changed. Take for example that:
Through the looking glass: Technology in a post-COVID-19 world
Technology has turbo-charged customer management capabilities resulting in the creation of entirely new business models across multiple areas such as e-commerce, ridesharing, over-the-top (OTT) media, fintech, ed-tech and hospitality.
Financial services and payments are witnessing a significant shift to digital modes of eCommerce, especially prepaid options offering ‘zero contact delivery’.
Supply disruptions are expected to change traditional repeat purchase behavior into increased adoption of predictable subscription services by customers.
Conversational assistants using natural language processing (NLP) and artificial intelligence (AI) have helped tackle overwhelmed customer support teams.
Companies are leveraging technologies such as augmented reality (AR), virtual reality (VR) and mixed reality (MR) to reimagine the customer journey and create a more real and personalized experience.
Shown below are examples of recent innovative creative being used by the insurance industry.
Focused on contactless coverage through RAPIDecision with no medical exam required. The policy is a blended term life offering with approvals in 1-2 days.
Allstate focused on a telematics product offering to capitalize on increased consumer interest driven from unprecedented reduction in driving miles.
Allstate debuted a new commercial highlighting bundled coverage across auto, home, life, identity and mobile phone. It’s an expansion of the traditional home and auto bundling that is typically seen.
Famers Insurance’s ‘Policy Perks’ commercials highlights benefits of policy tenure directed at increasing loyalty and retention.
Listed below are some innovative marketing and product plays in the insurance industry that are getting our attention.
Consumer interest in telematics has been one of the major outcomes driven by changes in driving patterns caused by COVID-19. Insurers are beginning to partner with manufacturers to make this connection even easier for the consumer. Leveraging partnerships with auto manufacturers and data exchanges can help to retain those customers looking to cut back on household expenses through innovative products like usage-based insurance.
“For us, Ford will help us rapidly evolve how we price insurance, measure real-time risk, and put drivers in control of an individualized pay per mile rate based on how and how much you drive,” Metromile CEO Dan Preston wrote. “Connected vehicles like Ford’s — packed with sensors and safety features — open up myriad opportunities for us to leapfrog ahead in each of these areas.”
“We’re excited about State Farm’s approach of using Ford’s built-in connectivity to promote safer driving habits and enable opportunities for our mutual customers to save money. This agreement further builds on our strong relationship with State Farm to continue to deliver value for our mutual customers.” - Ford Enterprise Connectivity Executive Director Stuart Taylor
Verisk, CCC, and LexisNexis provide data sharing capabilities for real-time telematics quoting by partnering with auto manufacturers. CCC’s offering, announced Aug. 11, teams its CCC X data exchange up with Volkswagen’s Car-Net connectivity and DriveView program. LexisNexis’ TelematicsOnDemand, announced July 24, leverages its LexisNexis Telematics Exchange, which currently receives information from General Motors, Nissan and Mitsubishi. Insurers participating in either exchange could review past data and immediately offer a quote. Telematics insurance startup Root is already confirmed to be using the LexisNexis option.
In conclusion, insurance brands need to actively address marketing efforts given the new environment to both overcome today’s challenges while also capitalizing on new opportunities. “Navigating the new normal” will require revised marketing guidelines for the end of 2020 and beyond.