Personalization: The untapped opportunity for insurance marketing

By Erin Slater

Insurers have a history of taking a one-size-fits-all approach to marketing. This tack has generally served the market’s needs — after all, insurance is a general requirement for a wide consumer base, and most consumers don’t have significant interactions with insurance carriers other than filing the occasional claim or renewing their policies every year. Even then, consumers may be more likely to remember the name of their insurance agent than that of their insurance carrier.

In another area of the financial services world, retail banks have nurtured more personal relationships with customers to great effect. Advanced technology for targeting and data collection has radically changed how they approach marketing. And, with this shift, consumer expectations are changing, too. Today’s consumers — particularly the digital natives of Generation Z — expect marketing messages to be tailored to their specific needs, in moments and channels of relevance. Retail banks are among those that are adapting well to these changing expectations.

As recently as five years ago, a more personalized marketing approach would have been too complex and costly for insurance brands. But technology has advanced, and personalization at scale is much more accessible for insurance marketers today. To avoid being left behind, it’s imperative that these brands begin using personalization and other emerging tools so they can develop marketing that’s more specific to their customers – current and future.

Here are some clear steps an insurance brand can take to begin the personalization transformation.

Mine brand data for audience segments and insights

A brand can’t craft a targeted message that resonates with audiences without first breaking its consumer base into carefully defined segments and understanding the unique motivations and needs that differentiate them from each other.

Insurance brands have access to a wealth of data that can inform marketers in this endeavor, including consumer life stages, locations and weather reports that frame the risks associated with different regions. What might a baby boomer in Florida find valuable from an insurer in preparation for hurricane season? What about a Gen Zer who’s learning about life insurance as a financial strategy for the first time?

Understanding the unique attributes and needs of each audience — and what products the brand can offer to meet those needs — is the crucial first step toward personalization. Smart analytics of existing data can help insurance marketers glean insights to deliver highly personalized touchpoints for current and future customers.

Leverage AI for actionable insights

The emergence of AI tools offers new opportunities for brands in any field to become more sophisticated in their audience outreach. Insurance brands should take advantage to enrich their consumer engagement strategies.

One insurance brand ahead of the field in this regard is Lemonade, which is leveraging AI tools to identify what additional services might be of greatest value to a consumer. These insights are then put into action with recommendations such as, “Homeowner’s insurance customers like you also bought jewelry coverage,” similar to the messaging a shopper would receive while browsing Amazon. This kind of add-on coverage can lead to significant premium increases for insurance brands — provided the recommendations really will add value for the consumer. Mismatches can backfire and even do damage to a brand, so getting the tools and input right is critical.

Take inspiration from retail banks and other financial sector peers

Retail banks have much more direct engagement with their consumer base, which means they’re a step ahead of insurance brands when it comes to personalized marketing campaigns and products. Think about banking apps that integrate credit monitoring, bill payment and budgeting software solutions so consumers have access to these tools on their phones – which is to say, anywhere, any time.

Retail banks’ success can be a source of inspiration for insurance brands looking for ways to up the personalization in their approach.

For one example, JP Morgan Chase is leveraging its 500 petabytes of consumer data to increase the relevance of its content, applications and services for consumer segments. This is thanks to an investment in AI and machine learning tools such as those mentioned above. By serving the right message to the right consumer, at the right time, in the right channel, the company expects to gain $1.5 billion in business value from this investment.

Insurance brands have everything they need to benefit from these kinds of insights, too. But they need a marketing strategy and investment to seek them out and put them into action.

Insurers have done well with a one-size-fits-all approach to marketing in the past. But as technology empowers more personalized approaches and consumers become accustomed to more targeted messaging, mass audience campaigns will no longer be sufficient to earn consumer attention and loyalty. Insurance brands that invest now in increasing direct engagement with their consumers in more segmented and personalized ways will be more competitive in the years to come.

Erin Slater is head of strategy-financial services with Quad. Contact her at [email protected].