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Targeting Niche Insurance Products

Most discussions about marketing personal lines of insurance typically revolve around property and auto offerings. But how can insurers target niche products like boat, ATV, ski-doo, RV and pet insurance?

It’s a dog’s life ….

Raise these niche products in some boardrooms and you might get a smirk or an exasperated eye roll. Some executives believe that, with premium fees for pet insurance ranging from only $10 to $100 per month, the revenue from pet insurance may not warrant a lot of attention.

But this assumption may mask an opportunity. The North American Pet Health Insurance Association (NAPHIA) estimates the pet insurance market to be over half-a-billion dollars a year ($82 million in Canada) and growing, with less than 1% of pets currently insured. And a new analysis by Environics Analytics reveals several demographic and financial trends now fueling the double-digit growth in pet insurance premiums:

  • Single women: Longevity and the likelihood of women holding professional occupations are key influences behind more pet ownership among this group.
  • More Canadians will soon be over 65 than under 15: What better way to repopulate an empty nest than with a Golden Retriever?
  • Condo-dwelling DINKS (Dual Income No Kids): Especially in urban centres, owning a dog or cat is often more appealing than the challenges—and cost—of raising children.

Take me home, country road ….

When considering other niche insurance products, RV policies may represent another opportunity. A 2012 Harris Decima survey for the Recreational Vehicles Dealers Association showed insurance premiums for RVs at almost $750 million, with annual average premiums of $406. Survey estimates reveal that over 14% of the Canadian population owns or has access to a RV. Other niche vehicle products include ATV/ROVs, with over 1 million owned across Canada (two-thirds used for recreational purposes) and over $370 million in annual premiums. While these numbers are not extraordinary, they still indicate a possibility for growth in under-served markets.

Leveraging Your Own Data

How do we find opportunities for your company within these niche markets?

The reluctance to spend a lot of money developing marketing strategies for these niche products is understandable. But you may have all the resources you need in-house. By leveraging internal data with external demographic, wealth or syndicated survey data, you can identify a targeted group of individuals more likely to be in need of these products.

Using a segmentation system like PRIZM, you can also link existing policyholder data to third-party research to determine the most profitable segments, locate them inside and outside your databases and ultimately find more like-minded prospects in the Canadian marketplace. The data can also be validated with external or third-party data such as the BBM and PMB syndicated surveys which have numerous questions on pets (as well as boats and other recreational vehicles) that are linked to the PRIZM segments.

Once you discover where to find the opportunities for these niche products, you can apply strategic and actionable marketing approaches to connect with these prospects:

  • Leverage internal data to find the best policyholders for cross-sell or up-sell
  • Test unaddressed ad mail campaigns to only targeted neighbourhoods, drastically decreasing your costs while increasing response rates (and improving ROI)
  • Empower broker partners with better leads and market intelligence
  • Refine creative for target segments so that the value proposition, images or messaging resonates with them

Don’t paws there, the possibilities are endless …

Why stop there? With so much valuable data available from such places as telematics, you can always tap other research sources to power a data-based marketing approach. And your pets will thank you, too.

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Editor’s Note: Stan Ivankovic is a Sales Consultant in the finance, insurance, travel and telecommunications practice at Environics Analytics ([email protected]).

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