Disruption is challenging the construct of the insurance product, which leads to a crucial question: How do we convince consumers that existing insurance organizations are still needed? A new commercial is starting down this road. And reviewing some alternative ads might be in order. We’d like your thoughts.
The End of Automobile Insurance
Back in 2012, Celent analyst Donald Light produced a report with the heart-stopping title “A Scenario: The End of Auto Insurance.” The assumptions were simple. As cars become more intelligent, roads made more safe, and laws better enforced, there would be fewer accidents and at some point, there would be a substantial decline in auto insurance premiums.
This was very controversial when it was first published. Fast-forward to today: Donald has updated the information in a new report which provides a more definitive roadmap for the automobile product, and the message has taken hold.
Moreover, the Internet of Things (IoT) promises to extend risk reduction beyond auto to homes, commercial property, and more.
Will insurance just disappear?
No, but there is distinct possibility of substantial reduction in existing premiums that will require a rationalization.
We will have to change business models. With that, we need new and different methods of selling and marketing. How can we increase customer engagement with a changed portfolio of products and services?
Some interesting examples are coming forward.
The old core marketing message will have to change (Get ready for a riskless life)
State Farm recently introduced an ad – referred to as ‘Wrong/Right’ – which asks, “What happens if we woke up one day and everything stopped going wrong?” It shows a dissipating tornado in the background, followed by a boy on a bike driving safely through a busy intersection, then a shift to a house on fire that magically stops burning.
This pitch cites other products and services offered by State Farm such as life, retirement savings, etc.
It ends with a boy riding a bike with no hands, and the voice over: “In a world where things stopped going wrong, where would State Farm be? Right here … to help life go right.”
Powerful stuff. It has 2.4 million views on YouTube, with 600 comments.
This size won’t fit all?
This approach is interesting, but probably more so for the larger insurers. Can smaller, niche players find a new tack?
In the IIReporter, Ken Hittel was quoted saying that “this commercial is to the insurance biz what the classic Apple 1984 ad was to the computer business.”
That ad, which was only shown once – during the 1984 Superbowl – showed an army of expressionless workers marching into an auditorium, at the front of which, a projected face was talking in monotone, extolling the value of having “one will.” As he says “We shall prevail,”a young woman (in colour) races into the room and throws a sledgehammer into the projection, which immediately blows up, freezing the audience in place.
The voice over says: “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like 1984.”
We’re not selling computers, but this approach might be interesting for smaller insurers and brokers. It gets high marks for disruption. And 1.8 million views on YouTube, with 570 comments.
Now, for something completely different
The State Farm Ad reminded me of another that ran two decades before ‘1984.’ I thought of ‘Wrong/Right’ as the polar opposite of the ad called ‘Daisy.’
The 1964 US presidential election pitted the incumbent Democrat Lyndon Johnson against Republican Barry Goldwater, a Senator from Arizona, who held hawkish military attitudes in dealing with the Vietnam conflict.
The Democrats produced the black-and-white Daisy ad which showed a very young girl in a field picking petals off a daisy, and counting out loud. As she reaches the last petal, she looks up and freezes as a male voice starts counting in reverse from 10. The camera closes in on the girl’s face stopping with just her eye filling the screen. The count comes to zero, and the screen fills with a nuclear explosion.
The voice of Lyndon Johnson comes on, saying, “These are the stakes: to make a world in which all God’s children can live, or to go into the dark.”
There was huge controversy, but in the end, Johnson beat Goldwater and the ad is remembered to this day by those of us who saw it in full context.
Very gripping, but negative is tricky to do well. It has 742,000 views on YouTube, with 985 comments.
The kids at home are warned not to try this, but a highly focused specialty lines writer might take note.
What do you think?
Are you feeling the disruptive waves? Are you considering new marketing approaches for new offerings? What do you think of the examples above?