Societal disruptions create opportunities for insurance brands
Businesses and individuals face many new threats, life events, and disruptions that are creating new opportunities for insurance brands to consider. These include the need for greater cyber security, for example. In addition, the emergence of new entrepreneurial ventures expands the need for small business insurance. Societal and technological trends like the sharing economy, smart homes, and the Internet of Things also produce new insurance possibilities. Insurance brands should also consider peer-to-peer insurance and on-demand options - rather than buying an annual policy, consumers are looking for ways to buy insurance on an as-needed basis or for a specific occasion.
Regulation puts customer first in life insurance
The playing field is getting more level for life insurers in the US because of regulations inhibiting companies from rewarding sales agents with high commissions. Because of regulatory pressures, pricing is increasingly transparent, allowing consumers to choose a brand based on a better understanding not only of the product features but also of the sales fees. The wild card, however, is the changing regulatory climate in Washington, but insurers are not uniformly opposed to regulation. Not having to pay high commissions to sales people allows for better profit margins without necessarily giving up volume – especially on a playing field that remains level with all players subject to the same regulations regarding fees and disclosures. Regardless of whether regulations are formally tightened, brands already are abandoning the agent commission model and taking the opportunity to communicate that they are doing so as part of a commitment to put the customer’s best interests first.
Executive Vice President, US Financial Services Communications
Brand building strategies vary among insurers
Unlike many categories, where brands tell similar stories, there are a variety of ways for insurance companies to create Brand Power, which is the BrandZÔ measurement of brand equity. It’s possible to have a transactional offer around price, a differentiated brand image created via credible and persuasive advertising, or build trust in the brand over the long-term. Meanwhile, insurance may be a category where local brands can build strong Brand Power in an individual market. In the UK, for example, NFU Mutual (National Farmers Union) has used TV advertising to support an offer built on the premise that consumers can trust a brand that has been insuring farmers for over 100 years. Who wouldn’t trust an organization that’s been offering insurance to the farming community for over a century?
Senior Account Director
Kantar Millward Brown
Data can help form emotional bonds with customers
Many motor insurers now use telematics, the “black box” technology that records driving habits. Insurers generally use the data to calculate motor insurance premiums based on actual driving habits, rather than demographics and other information, especially for young drivers. Some insurers in the UK are now looking to use the telematics data to create a more emotional connection with the customer. By interpreting the telematics data for the driver they can serve as a consultant and help them to drive more safely. Helping people become safer drivers, sends a powerful message about the insurers concern for its customers and its commitment to avoiding injury and saving lives.