Tailoring consumer engagement for today’s middle market-Deloitte
Article Synopsis :
Over the past five years, the individual life insurance industry has experienced slowed growth in the face of economic headwinds and frequent marketing ineffectiveness. But indicators point to renewed consumer interest in financial products, with life insurance representing one of the ripest areas for potential growth.
In “Life insurance consumer purchase behaviour – Tailoring consumer engagement for today’s middle market” Deloitte surveys over 1,700 middle market buyers and non-buyers of life insurance in the U.S. to understand how life insurers might better equip themselves to capitalize on seemingly favourable trends. The survey is designed to answer four key questions:
- What role do life events play in the purchase of insurance? Which are most impactful?
- What roles do channel and consultative advice play?
- What causes a buyer to allow a policy to lapse?
- How do preferences and behaviors vary by demographics?
High-level findings include:
- A viable market opportunity exists: the middle market represents a viable, interested, and underserved segment within the current life insurance landscape
- Current approaches are often flawed: few firms utilize the critical marketing, product, and sales approaches needed to effectively reach the middle market
- Being a “First Mover” has value: firms (carriers or disruptors) that recalibrate their approaches to the middle market will reap the most significant benefits
- A data-driven approach can guide the shift: Deloitte offers a proprietary information base to help guide “first movers” in approaching and capturing middle market share
The report identifies and explores common challenges carriers need to overcome to reignite consumer appetite for their products and services:
- Generational divide
- Evolving customer expectations
- Diminishing effectiveness of traditional distribution
- Ineffective sales and marketing strategies
The report lays down a three-step approach to identifying and harvesting a ripe consumer market base.
- Customer awareness: Build and know segments
- Purchasing decision: Engage buyers effectively
- Customer retention: Keep customers engaged
Revamping and/or overhauling of existing consumer identification and engagement strategies may be required. The report suggests carriers should be able to:
- Generate significant consumer data to identify and proactively predict life events
- Develop robust predictive analytics capabilities to identify timing of life events and moments within events that matter most
- Train agents and carrier representatives to effectively educate consumers on the potential benefits of life insurance
- Deploy an integrated, multi-channel communication strategy across digital and “human” communication channels
- Implement incentive structures based on creating long-term consumers
- Utilize an engagement model that incorporates past and predicted consumer characteristics
Carriers that reach consumers at the right time, connecting the dots between the emotion of a life event and the value of life insurance, engaging consumers in a way that marries advice with digital capabilities, will be the frontrunners capturing nearly $15 trillion in unmet need, growing faster and healthier than their peers.
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Digital Insurer's CommentsThe rules of customer engagement have changed. The way people perceive, connect and transact with brands is mainly driven by three factors:
- Searchability – How easily one can find the brand
- Social Advocacy – How others perceive the brand on digital/social media
- Digital distribution and fulfilment – How easily one can buy products and services
Insurance, historically a carrier/agent-pushed product, is fast becoming a peer-pushed product. Customers increasingly dictate the action. Loss of control requires carriers to be able to leverage available data and translate it into actionable consumer insights. Carriers that think they can dictate will lose out to carriers that have learned how to read and respond.
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