Direct-to-consumer insurance sales continue to box outagents and some insurance writers. The residual effect of this advertising isalso playing a big role in developing brandimpressions among carriers.
“Outsiders might get the misimpression that GEICO just camealong and ate up market share on account of its flood of advertising dollars,but it’s a lot more complex than that,” said J.C.Lupis, principal author ofthe study and editor of the trade site MarketingCharts.com. “It turns out thatmost people are pretty happy with their insurance carriers. Some of the mostopportune leads are among Millennials, who have not yet established thoserelationships. This is a long-term ground war with multi-billion dollarmarketing investments that pay out overseveral years, however battles forsegments and media happen quickly and decisively.”
The study shows how potential switchers respond to variousadvertising media; the current competitive spend among those media, and thedifferent strategies employed by majoradvertisers. Interestingly, some of therichest segments have not yet been targeted in all media.
Among the findings:
– Word-of-mouth and the online equivalent(consumer reviews) play an increasing role in purchase decisions. Some carriersare responding well to new communication channels, such asNationwide, whichanswers three out of four of its consumer questions on its Facebook page.
– Younger customers are far more likely to go witha new carrier than their older counterparts. GEICO’s reach for these switchershasn’t gone unchallenged, as State Farm and others havestarted to focus mediaweight and message to these Millennials.
– Carriers have vastly different rates ofefficiency when they spend money attracting site traffic online. Some arespending less than half the amount per referral versus their competition.
– The effect of the consumer email is beingfurther drowned out by the shouts of too many insurance marketing emails. Figuresprovided exclusively for the report showed an increase inemails sent of about200 percent within a nine-month period, among a sample set of insurers.
– Regionally, insurance leads differ a great dealin conversion likelihood. When combined with loss ratios, which also vary quitea bit by region, this creates an opportunity map showinghotspots likeConnecticut, where leads are much more likely to close, and those accounts havetraditionally seen below-average loss ratios.
The battle for independent agents is to prove theirexpertise, advocacy, and ability to drive savings at a time when consumers arebeing told that buying online equates to bothconvenience and price savings. Youngerconsumers are the most likely group to go online and buy direct. But, amongcustomers who use agents, they’re also the most likely to believethat agents can help them find a better price. This suggests thatmethods will play second fiddle to motives. The implications for messaging andmedia choices are quite large.
MarketingCharts.com is a daily trade publication formarketing professionals seeking hard data on industry trends. More informationon the study can be found atreports.marketingcharts.com.