The dynamics of marketing and selling insurance are rapidly changing. Savvy Generation X members who use the Web to comparison shop for insurance typically have different insurance providers for their auto, life and home. Baby boomers question how much insurance is too much.Given the diversity of today's insurance market, how do you reach your target customers? What do you do to stay ahead of the competition and secure long-term clients for all of your lines of business?
Understanding your target customers is the key to success. Carriers need to consider how they intend to target customers more efficiently and secure the next generation of adults and families as long-term clients-and underwriters need help in effectively identifying a specific segment of the consumer population for new business.
Carriers need to determine the lifetime value of customers and identify marketing strategies to find the most profitable ones. Insurers also should prioritize new markets for expansion and business development and direct agents in a smart, efficient manner in pursuit of new business.
Some basic questions
Start by asking some basic questions: Who are your best customers? What is the best location for your new office? Which services are most needed? And which will provide the best financial return on your investment? How can you minimize risk in decision-making?
Using target marketing solutions and demographic research can help you find answers to these key questions-and could even dictate whether your business flounders or flourishes.
For most businesses, location is a key element of information; more than 85% of data has a geographic component, according to some estimates. This includes insurance data, where a visual representation of assets, resources, and people as displayed on maps of various scales and content can help carriers make faster, more insightful decisions.
Location-based technology can provide a crucial added dimension to existing data. It can also offer solid ROI in four areas: cost savings, greater time effectiveness, improved quality of service, and increased revenues.
Adding location-based intelligence into insurance operations and functions can help organizations achieve benefits across the enterprise. It enables insurers to visualize and better analyze their personal and commercial offerings across their entire product portfolio.
Sharing this information with an organization's key stakeholders can have great impact in the areas of underwriting, claims, catastrophe management and modeling (see article on page 16).
For example, accurate historical data can help your organization make better rating, pricing and underwriting decisions based on a site's exposure to such risks as fault lines and flood plains, and its susceptibility to hurricanes, tornadoes and other weather-related events. Rates can be fairly determined or negotiated based on the frequency and severity of damage from natural disasters, perilous weather or environmental hazards.
Furthermore, pairing location intelligence with target marketing enables carriers to combine internal databases with external data sources, revealing marketing opportunities. This can help your company with site selection or target marketing.
An insurer can also use address validation and international geocoding to precisely locate current and prospective customers; analyze customer product profiles; analyze churn rates; determine "wallet share" versus competitors; and analyze relationships between existing locations, potential locations, competitors and customers.
Location-based intelligence also enables an insurance company to conduct analysis that assists in planning and optimizing territories for adjusters and third-party service providers.
More specifically, it gives managers the ability to query policy, quotation, and claims records to identify the areas of policyholder activity and efficiently manage service provider networks to increase customer satisfaction.
Leveraging new technology
Whether on the desktop, or via an intranet or the Internet, insurance professionals at all levels-from underwriters to policy line risk managers to marketing executives-are turning to new technologies to help them perform this type of analysis and make more effective decisions.
For example, if an insurer was planning to put an agent in a neighborhood of Punta Gorda, Fla., the company should first look at the demographic make-up of the area. It may find most of the population is retired or nearly retired couples who carefully watch their diet and exercise regularly, but also live in a coastal flooding zone. The insurer can then address these factors with the new agent.
In addition, location-focused software applications give insurers the ability to uncover market potential by demographic target market for proposed products. Analysis can be acted upon via targeted sales and prospecting campaigns that leverage national awareness or regional and national advertising.
Location information can play a key role in effective planning, targeting growth opportunities, and the ability to make the right decision.
Kimberly Morton is director of location intelligence risk management for MapInfo Corp., Troy, N.Y.
