The classic role of marketing usually entails defining the customers to be targeted, determining their needs, and then meeting those needs with products and services that best match their requirements.

This often involves a carefully choreographed mix of customer research, market segmentation, product development and the marketing communications that follow, including positioning via advertising and promotions using a variety of media.

With the pressures for sustaining growth that are inherent in today’s economy, however, many insurers are finding that “classic” marketing technologies and techniques no longer apply.

“During a recession, selecting of the right innovation tools couldn’t be more important,” says Julie Davis, executive VP for Chicago-based broker Aon Corp.’s “Wired For Growth” program. “For example, if your firm earned $10 million in annual revenue and you were able to achieve 10% organic growth, that end result may be less than your targeted year-end goal. A pipeline of new products and services may be needed to bridge the performance gap in a soft market.”

Defining these new product opportunities and the customers who will purchase them (along with the varied marketing messages that fill that pipeline) has become somewhat of a science—and one that requires sophisticated tools and technologies to execute.

Bill Jenkins, CIO of Penn National Insurance, a Harrisburg, Pa., provider of personal and commercial lines insurance, reports that his company’s IT budget is up this year in order to accommodate marketing and associated predictive analytics programs.

“We have predictive analytics initiatives in both personal lines (private passenger auto and homeowners) as well as commercial lines for workers’ comp, which, in effect, set our underwriting appetite, and also determine business segmentation and product development,” he says.


The growing role played by predictive analytics and business intelligence can’t be underestimated, notes Louis Rolleigh of Acxiom, a Little Rock, Ark., provider of interactive marketing services and technologies. Culled from the company’s larger database of 70 clusters that identify individuals comprising a variety of socio-economic factors, Acxiom offers 13 segmented groups based on similar insurance assets, intentions and behaviors, i.e., insurance-buying factors, from “structured prosperity” to “pennywise renters.”

“Cost efficiencies are derived from obtaining the data (intelligence) necessary to target the right market with the right messages,” he says. “This data correlates to activity levels, which correlates to likely risk, whether that risk is in personal lines property and casualty or health insurance.” It also means finding target-market rich geographical areas and the ability to rank geographies for market potential.

As product leader for Acxiom’s PersonicX household market segmentation technology, Rolleigh works with insurers to help them gain insights into the “who, where and what” of their marketing campaigns. “Insurers who are heavy users of segmented data tend to use it with their own tools and technologies to build a picture of preferences and behaviors,” he says. “Often this involves combining life-stage information, other consumer demographics and other third-party information with our technology to establish insights. As a result, there is a lot of insight available to them.”

That insight enables carriers to create customized marketing plans tailored specifically for its target audience. Insurers also must define the most appropriate medium for that messaging.

“There is a growing trend of marketing and communications efforts that are more meaningful, industry-specific and speaks to the challenges of your target market,” notes Aon’s Davis, who advises insurers to use collateral material, Web site content, industry-focused news and focused distribution channels in their targeted marketing efforts.

“A more intelligent client or prospect wants to know their insurance provider or partner understands their key business trends and critical issues in their industry segment,” Davis adds.


Davis is describing what, if applied to direct-to-consumer markets, would be called “advocacy,” notes Bill Doyle, VP and principal analyst with Cambridge, Mass.-based Forrester Research Inc.

“A large player like Progressive or Geico make, as part of their marketing efforts, rate comparisons possible,” Doyle says. “This willingness to acknowledge others’ pricing is powerful, because it supports customer advocacy. Consumers say to themselves, ‘this firm has my best interests at heart.’ United Services Automobile Association (USAA), San Antonio, uses a multi-level rating structure to go so far as recommending another carrier to the consumer. That kind of educational focus, made possible by technology, goes a long way in a down economy to create advocacy and ultimate customer loyalty.”

Educating the customer isn’t a new marketing technique, but it’s taking a front seat for many carriers determined to enter new markets with new products, such as optional supplemental insurance. At Combined Insurance, Glenview, Ill., consumer research pointed to the need to educate their existing and potential customers.

“We had done some consumer research, and learned a number of things during that exercise,” says Deb O’Connor, VP of interactive marketing at the supplemental insurance firm. “Consumers told us they didn’t understand the category of supplemental insurance; in fact, when they saw the AFLAC ad, they remembered the duck more than educational message defining what the coverage is.”

That insight, combined with a review of their four-year-old Web site, resulted in a site refresh, which incorporated data from the research to drive and build new educational content.

“We see places where firms provide education to the consumer,” says Doyle. “Allstate does a nice job on their Web site of providing basic information, facts about coverage, etc., and folks see that the insurer is willing to educate them, which is a huge positive.”

O’Connor admits the initiative was driven from the business side. “Because policies vary from state to state, consumers can’t apply online,” she says. “Instead, agents are required to respond within 24 to 48 hours. It’s a way to use the Web site to push the high-touch approach, because agents can conduct needs assessments and explain where the gaps are in the potential customers’ existing coverages.”

The business side also drives IT decisions that impact marketing at Penn Mutual. “We work very closely with the business,” says Jenkins. “In effect, we have orchestrated the IT prioritization process so that the business really sets the IT agenda.”


For direct-to-consumer marketing and sales, the Web can be an invaluable tool, especially when used in accordance with the carrier’s business model.

“The competitive set for auto insurance online differs from the competitive set for auto insurance overall,” notes Susan Engleson, senior manager with comScore Inc., a Reston, Va., Internet marketing research company and author of the comScore Online Auto Insurance Report released in April (see Figure 1).

“Some of the large, agent-based companies, such as Farmers, Liberty Mutual and American Family, generate very little quote volume online relative to their overall written insurance premiums. Meanwhile, [a company such as] Esurance is a strong player in the online space, but accounts for less than 1% of total auto insurance premiums written.”

Yet the power of Web site marketing and associated online sales cannot be dismissed, even among baby boomers. The comScore survey that serves as the foundation for its report indicates that people of all ages buy auto insurance online, including 17% of those over the age of 60, who have been with their current insurer less than five years.

“A significant finding in our report is that 75% of consumers wanting more information after seeing an auto insurance ad will go online, including 22% who will use a search engine,” O’Connor says (See figure 2). “Our data shows that search has grown substantially as a source of online auto insurance quotes over the past few years.”

And insurance aggregators, such as, use the Web as a tool to market to agents. The provider of auto, home, life and health insurance offers an agent blog with daily sales and marketing tips for insurance professionals.


As insurers take advantage of the Web, some are testing social networks in order to attract a younger subset of potential customers. Unitrin Direct, a Chicago provider of auto insurance, pioneered such an approach on Second Life, a virtual society in which users can create “avatars” of themselves and walk or fly to various points on the Second Life globe. In this case, it’s Unitrin Direct’s headquarters, where visitors can obtain online auto quotes and visit with other Unitrin customers. When asked about its Second Life initiative’s results, Unitrin was unavailable for comment.

Insurers also are taking advantage of YouTube’s editing tools, which enable companies to post videos to the Web and continually analyze the marketing value of those products, at no cost.

This approach appears to be working for several carriers, such as Travelers, MetLife, Allstate, Bangkok Insurance and Eagle Insurance (extreme local markets). New York technology provider JustSystems, a provider of XML and service oriented architecture technologies, also is taking advantage of YouTube. The company’s video, “XBRL in Plain English,” is designed to educate the financial services marketplace on XBRL, (eXtensible Business Reporting Language), an open standard that supports information modeling and the expression of business semantics. At the time of writing, approximately 2,170 visitors had viewed the video.

This free marketplace has its share of a backfire potential—in the same environment in which viewers can receive positive branding messages, pejorative messages also are available. To date, close to 1.9 million viewers had logged in to view “Luke,” an “R” rated satire of a customer unhappy with his insurance quote.

Mobile technologies are one of several tools in Penn National’s marketing toolbox, and Jenkins reports that his company’s marketing reps are using a variety of mobile computing devices. “We provide mobile computing capabilities to our field staff, including marketing reps, which assist them in their marketing efforts in a variety of ways,” he says.

“Going forward, the insurance industry will intensify its use of the Internet to increase brand awareness and brand engagement,” comScore’s Engleson says. “While online advertising was once seen as a direct response vehicle with the effectiveness of an ad measured in click-thrus, numerous comScore studies have shown that online advertising also has a brand-building impact. Many auto insurance companies also have interactive micro-sites that tie into their ad campaigns and engage customers with their brand.”

Aon’s Davis asserts that in tough economic times, flexibility is key. “You need to be prepared to respond to market shifts with innovative responses. Leading change in your industry and your company can help you stay competitive.”

(c) 2008 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

Direct Mail and the Internet: No Longer an Oxymoron

In today’s economy, the “technology begets technology” idea (using technology to determine new business targets, and technology to carry and host the message), seems to hold true even for an old-fashioned direct mail campaign.

It has been reported that insurance marketers spent $6.81 billion in 2007 on direct marketing-related advertising expenditures, which generated more than $55.53 billion in U.S. sales. Those are some pretty strong numbers in favor of continuing direct mail campaigns, even in a shaky economy, notes Frank Defino Jr., VP and managing director of Tukaiz, Franklin Park, Ill.

The opportunity, according to Defino, has its roots in stats from the Direct Marketing Association (DMA): Nearly 33% of people who respond to direct mail do so by going online.

“This opens a window of opportunity for insurance marketers willing to incorporate what is known as Personalized URLs (PURLs) as a part of their direct mail campaigns to increase response and return rates,” he says.

Defino believes that a print campaign that piques a prospect’s interest and directs them to a personalized Web page that contains relevant and rewarding content is a powerful tool.

“Using personalization in direct mail efforts, coupled with creating a landing page that responds personally to your customer, combines two channels of communication in a strong way, and responds to the fact that a high percentage of people are going online today to get policy particulars and price quotes when buying insurance,” Defino says.

Defino believes combining direct mail with the power of the Internet provides benefits that:

* Capture the attention of the recipient with relevant and timely content

* Integrate data capture into existing databases and CRM systems

* Know which recipient visited which page, and identify individuals with high interest in your products

* Automatically initiate follow-ups

* Track when someone responded to an offer for more information or a quote

* Link to existing online content or cross-sell and up-sell products and services

“By leveraging the advantages of personalized direct mail pieces with personalized URLs, you will drive prospects online where research indicates they are more likely to initiate their policies,” Defino says.

Software that has the ability to create both the personalized printed piece and the PURL also can perform a variety of additional functions, including gathering additional data, creating surveys and initiating a number of follow-up marketing activities.

“The real power of PURLs, however, is that they are engaging and relevant to end-users and hold the attention of today’s entertainment hungry, technology-loving buyers, enabling insurance marketers to have a competitive edge in any economic environment.”

(c) 2008 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access