Full disclosure, I work for a property and casualty insurance software company. That said, our software, being focused on automation and increasing direct interaction with the insured, has got me thinking about how insurance carriers should be prepared to sell to the “generation x” and “generation y” crowd. The predominant sales model in both personal lines and commercial lines products is to sell the product through an intermediary sales agent, who sometimes works for the insurance carrier, but often times is independent. Insurance is complicated, and prior to the web this model was essential to connect buyers and sellers. However, today we have Geico and Progressive increasingly showing us many of these insurance products can be explained and sold online.
I have only bought personal lines products thus far in my life, and have made decisions on fire dwelling, condo, auto, motorcycle, and umbrella policies. Here’s where my heads at, these products are not sexy. I don’t care what carrier I’m insured with. It’s not like buying a new car, or clothes or a fancy handbag. Differentiation is not the goal. I want to know I’m meeting legal requirements, covered for the types of risks I could be exposed to, and will have a great customer experience should I actually have a claim. Ultimately, trust is the most important buyer value, but price can lead the decision. Seems contradictory I know, but think about what insurance is. As a younger buyer, one is going to have their parents feedback in their head as to what they “should do”, but is also going to try to get the cheapest rate. I know this because I recently reevaluated all of my policies with my boss, who I consider to be an expert on most lines, and he joked with me, “you probably haven’t evaluated your coverage’s since college, huh?!” Yep! I was just looking for the lowest monthly cost on my automobile insurance not even realizing I didn’t have enough coverage to handle the cost of repairing most of the nicer cars on the road where I live. Whoops.
So, how should an insurance carrier sell to the gen x & y crowd?
Take advantage of social networking and tried and true ecommerce. Here are some key items essential to building trust in the brand and inspiring the herd buying concept:
- Potential Insured should be able to see who their friends are buying from
- Claims handling and overall customer service needs to be broadcast
- Incentives for bringing a friend
See who their friends are buying from…
It would be great if I could see who my friends have bought their insurance from, particularly when I’m about to purchase a new product that I’m not familiar with. For example, when I needed to insure a wedding ring recently, I would have loved to see who most of my friends insured with. This could be done using Facebook where a fan page or custom application could be built to promote the insurance carrier and illustrate to potential buyers which of their friends already have policies.
Overall customer service needs to be broadcast…
Lately I am making a lot of buying decisions following crowd sourced input from folks on Yelp. It started with entertainment venues and restaurant reviews, but has since grown wildly popular to yelp on how good a plumber is or moving company. Almost any local business or service has feedback on Yelp, and if they don’t, then they’re suspect! Here’s where I would use some gorilla marketing tactics to get my insureds to start broadcasting their experience with me the insurance company. (This of course assumes you have good customer service.) For example, after a call with an insured, I might ask them to go yelp about their experience, or even have the follow up email skip the lame customer survey and directly ask them to go yelp about their experience or comment on the fan page. I’d have the claims adjusters be my primary marketing team. They should be trained to inspire each customer that recently had a claim to broadcast their experience (hopefully positive). I would have them give the customer a note and verbally ask them to tweat on the spot about how awesome they’re getting taken care of in a time of disaster in their life. Imagine the impact on a buyers decision to switch carriers if they see a twitter feed on one companies fan page that shows customer after customer tweeting about how awesome their claims adjuster was!
Incentives for bringing a friend…
Incentives are tricky and often lead to insignificant results. I don’t think I ever earned anything from pitching my family on ING Direct when they first came out, but the $50 or whatever it was got me to try. In this world, cash isn’t always king though. Other incentives might be recognition on fan pages as having some kind of wisdom, special ability, cooler icon next to their name, etc. Often a call out that creates a sense of celebrity can be more powerful than a gift card.
But all this marketing will only take you so far. You have to change the buying experience. My recent example of the wedding ring is one that almost made me search for another rental insurance carrier. Between the multiple phone calls required, days of waiting for quotes, limited access to view the details (e.g., was it for replacement value at the same manufacturer or would they just give me another ring of similar qualities – horror stories online), I wanted to work with someone else. Oh, and don’t even get me started on why my fiancée had to go to their office to sign an application and actually show the ring.
To really motivate the next generation of insureds, the buying experience needs to be fast and painless. So, when you get them online all excited about your amazing claims adjusters and they see that even though they have never heard of you, but many of their friends are customers, get them a quote online fast and let them complete the purchase seamlessly. Now, you may be thinking, “well that’s easy for auto insurance, but what about homeowners policies that are more complicated or a small business that doesn’t understand liability coverage?”. Well, this is where I go back to the “seamless” statement. First of all, drop the insurance lingo. Find a way using wizard type questionnaire or laymen’s terms to infer what they need, then present it to them rather than asking them to choose from a menu of insurance products that looks like it’s in another language. Assuming you can get past that part, then I’d say, use the agents! Here’s where agents can continue to play a role with the next generation of insureds. When I’m in the quoting process and get to something that either concerns me or I can’t figure out, you should have an easy “get help” process that connects me with an expert that can guide me through the buying decisions.
Now, remember, this needs to be seamless. If I am stuck and I see something that says “chat with an agent” or “have an agent call you”, and I choose that path, I better not have to give them my info again. They should be able to pull my quote right up and begin the conversation with, “I see you’re looking to add a wedding ring to your rental insurance. It all looks right to me, what can I help you with.” I then say, “Well, I was reading online that sometimes the coverage doesn’t give replacement money, but instead makes you go buy the ring from one of the insurance companies jewelers. I have a specific ring from a specific retailer and would need to replace it with the same.” The agent would then say, “No problem, the option you selected, which we call an endorsement, covers you for just that situation, but don’t take my word for it, pull up the site. See where it has a link that says “how a claim would be handled? Click on it and you can read what will be in the policy itself.” “Great!” I say and close out the call buying online. But you know what, when I get the policy in the mail it has that agents name on it and a special note saying, “I’ll always be available for any other future questions and keep me in the loop if you ever have a claim so I can make sure you get taken care of.”
- Insurance products are not sexy so differentiation is on brand trust and customer experience
- Use social networking to get groups of people to buy together
- Automate the process to seamlessly take care of the insured in their world…online
If an insurance carrier gets this all right, my guess is they could stop focusing on the price and start charging a premium.