- Where Insurance & Technology Meet

The New Reality of the Insurance Marketing Function

As a longtime insurance expert, I’ve noticed interesting changes taking place in the industry. While insurance carriers continue spend a large portion of their technology budget on underwriting, policy administration and claims, the marketing function is emerging in importance.

The Rise of the CMO

We’ve seen dramatic changes taking place on the Life insurance side. For example, last year Lincoln Financial created a new position overseeing strategic marketing and AXA hired a new CMO from outside the industry.

Marketing executives are starting to control larger budgets, influence more aspects of insurance operations, and become key players in strategic decision making. According to IBM’s CMO Study, marketing executives within the insurance industry are not just managing the promotion of products, but are being asked to help with pricing, product development and placement. In fact, marketing executives are increasingly influencing the core insurance business function and are becoming as critical to driving the business as an actuary or product development executive.

Four Objectives in Auto Insurance Marketing

What I’m seeing on the personal auto side is really interesting. I did a very unscientific study of nine of the largest North American car insurers and spent a month watching their commercials. Yep, I forced myself to turn on sporting events, reality TV and fancy award shows. What I found was more than 20 concurrent ad campaigns (validated from the carriers’ websites) designed to generate some kind of action from drivers. I noticed four basic objectives of these campaigns:

1.  Save Money
Think of Geico’s “15 minutes…” campaign, but also Flo from Progressive, the Double Discount football player from State Farm, and Nationwide’s World Greatest Spokesman (blue phone), among others, which all combine humour with a serious explanation of how insurance works. Also, Canadian Direct Insurance, an insurance company operating in British Columbia and Alberta, has been able to compete against big government insurers in Western Canada with its cost-savings message and quirky campaigns, showing the brand’s fun and friendly nature. Who doesn’t like to save money?

2.  Risk Protection
This is one of my favorites because of the almost infinite ways to explain risk. The basic premise is to highlight bad events that could happen and the need to be insured. Canadian insurance company Intact’ use this approach with their home and car insurance while North American State Farm highlights messages on safety. University of Farmers as well as AllState’s Mayhem address home owner’s versus car insurance. Who doesn’t want to protect themselves against bad events?

3. Customer Service
Many companies, like Amica, focus on customer service with a more serious tone. But if you are like me and want a good chuckle when you see commercial, companies like Travelers, Liberty Mutual and State Farm’s “State of Regret” are impactful. Who doesn’t appreciate good customer service?

4. Brand Awareness
These commercials, like AIG’s “Thank You America” and USAA’s heartwarming campaign, are little more serious in tone. I like Liberty’s “Responsibility” campaign where people see others doing good, and do something good themselves.

Building a Responsive Infrastructure

The intended result for all of these campaigns is for consumers to contact the company.  And the business must respond according to the expectations built up in the commercials. With all of these leads coming into their organization via different channels, how do carriers respond accordingly? How does a marketing department take more responsibility in turning a campaign into qualified leads, feeding those leads to the right channel at the right time, and to incorporate results into the next campaign?

To me, the major factors are the capabilities and the marketing architecture insurers have in place to respond. Carriers are centralizing their marketing functions so they have one set of systems to manage all aspects of their campaigns – online, digital, email, print mail, radio – and of course television campaigns. The marketing function must not only drive or be an integral part of the company business strategy and operating model, but it must also continue to keep the pulse of the markets and influence the audience through campaigns, measurements, and messaging.

Building and managing the infrastructure to respond should be part of a company’s overall culture and should include aspects of awareness (i.e. event detection, web and digital analytics), decisioning (i.e. segmentation, offer management, next best action) and execution (i.e. lead routing, email, digital marketing) as well as overall marketing operations like planning, budgeting and ROI tracking. Basically, the type of functions that might have been dispersed throughout the organization before, or handled by individual lines, are now leveraging a common set of tools and assets.

Stayed tuned for my recommendation on what core capabilities are needed to respond quickly and efficiently to a carrier’s marketing campaigns.

Editor’s Note:

David Dobrindt is part of IBM’s North America Smarter Commerce for Insurance practice. Smarter Commerce is an integrated approach to doing business in the age of the empowered customer, addressing every phase of the distribution lifecycle, 

David will be participating in an industry panel, Navigating new territory: Marketing in insurance in the age of the mobile, social, online price shopper.,  at the 2013 Technology Conference, March 18-19, 2013 in Toronto.