eMarketer: Insurers Slowly Move to the Web

Michael Costonis
Executive Director, Insurance, North America
Accenture

Michael Costonis manages Accenture’s insurance practice for North America. Costonis spoke to eMarketer’s Lauren McKay about what insurance customers need today and how providers are stepping up to meet these demands.

eMarketer: How would you characterize the state of insurance marketing online?

Michael Costonis: Insurance is probably slightly behind banking, which is really behind the rest of the world in terms of online sophistication of marketing. The retail and consumer products industries are miles ahead in doing true digital-based marketing, customer segmentation, personalization of web experiences and actually securing business online.

eMarketer: What’s changing with regard to helping people find and buy insurance products? How are insurers responding?

“Insurance companies�are turning to techniques to attract and retain customers that have been proven out in the retail and product-based industries.”

Costonis: Insurance companies across all segments of business-life, personal lines and even some segments of commercial-are starting to turn to techniques to attract and retain customers that have been proven out in the retail and product-based industries.

We’ve started to see a higher percentage of potential insurance customers showing up on the internet as their first stop for an insurance transaction, primarily to research and gather information. The statistics estimates vary from the low 70% range to the upper 80% range. Insurance companies are trying to grab hold of that transaction, identify it, attempt to profile the customer and understand their intentions so that they can match the web experience to that customer.

eMarketer: How are insurers trying to capture the consumer’s attention?

Costonis: The same kind of digital marketing techniques that companies like Amazon and Best Buy and Proctor & Gamble use are being pulled into the insurance process. Rather than search engine optimization where a company’s link gets surfaced for a fee, they’re getting more intelligent about what customers are actually looking for. What are their browsing habits? What kind of customer profile would that represent? Then, how will I best match my services to that? There has been a definite shift in the maturity of the online transaction from literally surfacing a link to doing pre-profiling and pre-segmentation of the customer to be able to match the web experience to that particular individual.

eMarketer: What does the typical buying cycle for insurance look like? How do you see it changing as a result of digital capabilities?

Costonis: The typical buying pattern is highly digital. It starts with some degree of searching for information about product and then responding to that information effectively.

“The way insurance companies search for, identify and respond to customers where they are in the online world is going to differentiate them.”

The old paradigm of search and then respond to a consumer’s search will be replaced with the insurance company trying to find the customers wherever they happen to be-whether they’re in a Facebook group, a section of LinkedIn or on a blog. The way insurance companies search for, identify and respond to customers where they are in the online world is going to differentiate them. There’s also going to be more proactive digital-based outreach around renewals, potential renewals and upselling.

eMarketer: Is there significant demand for online insurance transactions?

Costonis: Not only is the demand there, but it’s absolutely critical to survival. Accenture did a multichannel study that looked at where and how insurers were planning to invest to drive up these capabilities.

The study shows that there’s a massive investment gap between the high performers and the low performers. The high performers are looking to invest $126 million over the next three years into their multichannel strategy. The low performers, you could argue, are investing about half to two-thirds of that amount.

eMarketer: Who are the top performers and what are they planning to invest in?

“The No. 1 bullet item is digital marketing. The second is mobility. The third one is around channel integration.”

Costonis: Life insurance and property-and-casualty providers are high performers. The No. 1 bullet item is digital marketing. The second is mobility. The third one is around channel integration. If I do sell via agent, can I also connect to my online channel? Can I connect it to my mobile channel?

eMarketer: What are insurers doing in mobile?

Costonis: It’s been an interesting case study with regard to mobility. Most companies rushed to get some iPhone apps out to the market. Some of them were a carbon copy of bad legacy processes-just uploading a claim, finding out the status, those sorts of things.

Now we are starting to see more full-featured apps. One insurer, for example, has an app that answers, “How much is my life worth?” It does a “what if” analysis, to then tell you what your insurance needs look like. Another insurer has an app that allows you to photograph a check to do a deposit. Insurers’ first steps in mobile were designed to gather media attention, but now they’re becoming more innovative.

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