How Car Insurers are Tackling a Digital World
By Bobby Johnson
June 1, 2022
By Bobby Johnson
June 1, 2022
Car insurance is a fascinating product: mandatory, ubiquitous, and yet highly competitive. Recently, car insurers find themselves in a changing landscape where marketing requires multiple avenues to succeed and customers are more savvy and picky than ever.
The pandemic and economic uncertainty have pushed more people into social media usage, too, both for connection and distraction. Customers are everywhere, but they’re not all in one place.
The most successful car insurers are those embracing this digital world and reaching out to budget-conscious consumers where they live.
Between increased inflation, supply chain troubles, and the economic hangover from Covid, customers everywhere are struggling to make their dollar go further. Car insurance rates are up 3% on average, and even as high as 20% in some regions, and consumers are on the hunt for cheaper insurance.
Car insurers can help those customers seeking lower premiums by offering them a telematics policy. A telematics policy offers discounts on insurance rates as a trade-off for gathering consumer driving data. Typically, this data is gathered through a smartphone app that records the driver’s speed, phone use in the car, time of day, braking habits, sharp cornering, etc.
It’s true that some consumers may balk at what they might see as a willing invasion of privacy. However, a TransUnion survey from March of 2022 found that 65% of consumers offered a telematics policy accepted. This is a huge rise from even just November of 2021, where only 49% of those offered the policy chose to participate.
It looks like consumers at the moment are far more interested in an affordable insurance plan than they are in data privacy concerns. Of course, this doesn’t mean insurers shouldn’t be protecting their customer’s data. Consumer Reports and the Consumer Federation of America have already begun watchdogging telematics, and have sent public letters to insurance companies asking them to be more accountable and transparent with consumer data.
As always, the best policy is to collect and protect consumer data judiciously and cautiously.
There are two big reasons car insurers should pivot harder to digital marketing channels: you’ll better reach Millennials and Gen-Zers, and you’ll spend less doing it.
When it comes to Millennials and Gen-Zers, digital marketing is extremely influential. A recent Deloitte media survey found that 66% of Millennials ( and 55% of Gen-Z) were swayed by social media or targeted ads.
Insurers are running toward this strategy because it works. According to that same Deloitte survey, marketing teams at P&C insurers found that of their entire engagement and communication strategy, social media scored the highest in interaction.
Digital media buys are also cheaper than traditional ads. A TV commercial, especially during a prime slot, is expensive. An Instagram ad or a paid search ad is far cheaper, and you get the benefit of better data analytics.
A social media ad can be laser-targeted to the demographic of your ideal car insurance customer. After its run, you’re also given a comprehensive picture of how often the ad was seen, how many clickthroughs it received, and the demographic information on those who engaged with it. Then, it’s easy to refine the ad (or just alter the demo) and run it again.
This allows social media ads to be extremely efficient from an ROI perspective, allowing you to use data to hone in on who exactly your ads are engaging.
One of the key takeaways from Deloitte’s 2022 Insurance Industry Outlook was that the ability to see and customize their insurance attracts shoppers and helps them stick around.
In fact, insurance customers under 55 said that access to digital tools that allowed them to engage with their policy was a “prime motivator” for changing insurance (which they are 3x more likely to do than other demographics).
Consumers want to be able to access and even customize their insurance policy when they feel like it. The primary reason for this is generally price–budget-conscious consumers do want to feel that they’re overspending on the coverage they don’t need.
The Deloitte Global Auto and Homeowners Consumer Survey found that a major requested feature for insurance-buyers was wanting the flexibility to change their coverage on the fly.
The best way for car insurers to make this happen is to invest in a comprehensive consumer portal, accessible online or through an app, that allows these policy changes to be made on a reasonable timescale. An app that shows the user the benefits and limits to their coverage in plain language, and offers the ability to alter their coverage by individual feature.
If you’d like some guidance on how to leverage social media ads or to get your telematics policies out in front of potential customers, reach out to Inspira Marketing Group today.
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