The Insurance MarketBy Tom Dougherty
Opportunities In The Insurance Industry
The insurance industry.
I can save 15% by switching to GEICO? I can get life insurance for less than a dollar a day with Prudential? State Farm will “protect the roof over your head and everything under it, especially your sense of security.” But guess what? Progressive is telling you I can save $550 on my auto insurance, and New York Life says I can have life insurance for the cost of a cup of coffee, and Travelers tells me that they have “complete protection for your home.”
The Worst of The Worst in the Insurance Industry
Health insurance is one of the worst of the insurance industries because nearly every player in the market says the equivalent of: “We have the right coverage at the right price.”
Messaging and imagery are nearly identical.
So, are consumers making their decisions based simply on price?
Or, are you relying on your direct and indirect agents to “build relationships” to gain customers? Perhaps it is talking about your strength and stability? (GEICO has a spot like that.) From a brand perspective, this is craziness.
Limitations in Insurance Messaging in the Insurance Industry
The Insurance industry is regulated. So there are some legal limitations. Prices across the board are very similar. Agents do what is in their best interest, not the company they represent and will sell what they believe is the easiest and personally most lucrative insurance policies. Direct agents work to build relationships with their customers and take those relationships with them when they move on to the next company they represent.
As the business norm, insurance companies have recognized these realities and have attempted to overcome them in a variety of ways including messaging. Insurance companies have gone direct to consumers, effectively eliminating the need for an agent as well as reducing costs. They have modified policies to be less expensive by removing options and increasing deductibles, and they are constantly telling consumers how stable they are.
The Insurance Industry Has Missed The Boat
But what insurance companies, by and large, have failed to recognize is that they have given customers no reason to choose and/or switch.
All insurance industry messaging and positioning in the insurance category has something to do with “table stakes.”
Or, the minimum ante’ to even be a player in the category.
Least expensive, most stable, on your side, best service, policies to fit your needs, and honesty. Helpfulness, transparency, good corporate citizen, and easy. Just to name a few. All are all characteristics that ALL insurance companies strive for (or should).
These things are the definitions of an insurance company, after all. Certainly, all of these things should be part of the message and position – they should just not be the whole message.
This is why some have resorted to trying to entertain us. Like GEICO and Progressive. All hoping we will be so thoroughly blown away by their wit and creativity that we will all run to our phones. Or our computers to switch our insurance.
Their approach is suspect. But, they have at least recognized the fact that they need to give prospects another reason to choose. And, at the end of the day, GEICO and Progressive also say, “We will save you money.”
The Answer for the Insurance Industry
Improve the messaging. Make it more emotional and important.
So what should insurance companies say? The first question to ask is what do your prospects see themselves as or aspire to be? (It’s a pretty safe bet it is not a caveman.)
Sure, they want to save money, they want to feel secure. And, they want things to be easy. But, these things carry no emotional weight nor are they differentiating in this category.
The first insurance company that finds the answer to this wins. They will position themselves around it (not just in a marketing sense but operationally as well). And, vigorously tells the world about it will have a huge competitive advantage.
An insurance industry brand rooted in an emotional context not only breaks through the clutter of the status quo. But, it also would set a company apart from the homogenized category of insurance it has become.
Sadly, insurance has become a commodity product and any number of companies can satisfy the basic needs. Embracing this reality and providing a reason to choose that goes beyond table stakes is the first step in winning in your category.