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Andrew Davidson
Susan Menke
Susan Wolfe
Daniel Hayes 
Lisa Hronek 
Allison Lehmann 
Chris Zagorski Insurance
Q&A from “Insurance Communication: Moving Into Tomorrow”
Thank you to everyone who attended my webinar on February 25, 2010 about the future of insurance communication and marketing. I hope you found the information useful and relevant to your business, and please don’t hesitate to reach out to me with any questions or comments.
If you missed the live webinar but would like to view the slides or a recorded version of the presentation, click here.
We received many interesting and thought-provoking questions, which I’d like to answer here for you:
Do you think advertising iPhone apps in direct mail would be useful?
Absolutely! I think advertising apps in direct mail, in print ads, on websites and on TV is the best way to market them. The key is to get people connected. Why build an app and just hope people will find it? Make them find it. Then, after people check out an app once, marketers should give them reasons to check back. Use online events, announcements, advice, anything that you can to grow the bond between your market, your brand and your customers.
How should a company respond to criticisms of its products or service that it finds on a social media website?
First, don’t be defensive. Find a positive way to frame the situation. Accept what is being said, then start to manage the issue. Most customer complaints come from the frustration of a customer feeling he or she is not being heard. A response directly to the customer is often a surprise, going above expectations. This can mellow a situation quickly and often favorably change the customer’s opinion.
You mentioned high unemployment rate leading to consumers seeking their own insurance. Which companies are targeting consumers best? Aetna?
Aetna is a good company. So are the Blues, United Healthcare, Wellpoint, Humana and Kaiser Permanente, to name just the ones that come immediately to mind. It is difficult to target the unemployed. Most companies use aggregators who email people comparisons of health insurance rates. Insurers are also putting more information on their websites to educate consumers on how to make a choice.
Why do you think auto insurance mailings were down? Are other channels more attractive?
I don’t think this was a trade-off from one channel to another. With the economy weighing down on marketing budgets, cost control could have played a role in the slight decrease in direct mail. Given that life and health insurance mail increased, I feel confident insurers will continue to use direct mail as a primary marketing medium.
Can you shed some light pertaining to health insurance. What are the recent trends? Are consumer driven products here to stay?
With healthcare reform still up in the air, it’s difficult to determine where individual health policies are going. For instance, I’ve heard health savings accounts discussed as nearly extinct, but I’ve also heard them talked about as an integral part of healthcare reform. The future is still unclear.
What is happening now is that health insurers are finding more individuals looking for policies for the first time. These are people who don’t know how to shop for health insurance, so they need to be educated about their choices and how to evaluate their own needs. This is an opportunity for companies to become trusted advisors.
How would you recommend companies start using social media to communicate? Which network is most important if you only have the resource to do one?
If I had to choose one, it would be Facebook, because it is the largest. And I would not be afraid of the size. Social media is still a developing environment, it is better to get in and learn how it works and its advantages now with everyone else. Otherwise, you’ll find yourself behind the curve trying to catch up.
Direct mail was still important in 2009, but what do you see looking 5 years out?
Direct mail will be important for how insurers market products for a long time. Life and health insurance direct mail has increased since 2008. While there was a small decrease in P&C, auto and homeowners mail in 2009, this was more likely due to budget constraints than to a long-term change in strategy.
What I would like to see is an increased use of mail to build a brand, to become more integrated with other marketing channels. It can be so much more than price promotions.
WEBINAR: “Insurance Communication: Moving Into Tomorrow”
We’re hosting a free webinar today on the future of insurance marketing communication. You can register by clicking here.
The current economic slump, mixed with new technologies evolving in the world of social media, has caused drastic changes in the way insurance companies choose to communicate with their consumers. People are conscious about saving time and money—now more than ever—and insurance companies are faced with the challenge of how best to reach prospects and clients and how best to position their messages in this ever-changing era of new media.
In this webinar, we will discuss:
– The current state of insurance communication and messaging
– Social media outlets that can be used for insurance communication
– How people perceive insurance and their growing need for education
– How insurance providers can use emerging technologies to connect with customers
Could annuities help secure retirement for all ages?
Annuities are being promoted by the Obama administration as a way to give Americans a better shot at secure retirement. This is based on a report from the administration’s Middle Class Task Force that came out last week. It’s good news for the annuity sector, which typically isn’t very popular with consumers.
Annuity direct mail
Direct mail for annuities started off strong in Q1 2009, but for the year in full, estimated mail volume was down compared to 2008. Perhaps with Obama’s support of annuities, marketing support will increase in 2010. New York Life Insurance is the top mailer based on 2009 estimates, followed by USAA and Fidelity.
Direct mail offers rely on “guaranteed income” and tax advantages
New York Life sends out co-branded offers with AARP. The messaging focuses on annuities as a way to “guarantee income” in retirement.
USAA also markets based on guaranteed income. The company’s letters refer to guaranteed income with “no market risk” and the tax advantages. USAA also uses email to promote annuities, encouraging recipients to consider an annuity in light of the “market downturn.”
Fidelity’s offers focus on the tax deferment advantages of annuities. One offer asks, “how can you tap into the power of tax deferral…to help make sure your entire portfolio is more tax efficient?”
Annuities in 2010 and beyond
Despite the endorsement of the Obama administration, annuities still face some big hurdles. Investors seem to want to steer clear of them and consumers aren’t terribly interested either. The following items in discussion might have positive impact on the industry:
Automatic enrollment – The Obama administration could nudge employers into automatically depositing some amount of new retiree’s 401k into a basic annuity. If after a certain time period the retiree decided they did not like it, they could cancel it and get the money back with no penalty.
Tax incentives – A House bill was introduced in June 2009, which calls for waiving 50% of the taxes on the first $10,000 in annuity payouts each year.
Greater Transparency – A bill introduced in the Senate in December 2009 would require 401(k) plan sponsors to inform participants of their projected monthly retirement income based on the current account balance. This would provide a way for retirees to compare the lump sum in a 401(k) to the expected monthly revenue stream of an annuity, making for an apples-to-apples comparison.
Medicare direct mail up 23% in Q4 2009
There are two months to go in the open enrollment period for Medicare policyholders. Medicare acquisition direct mail volumes for the last quarter of 2009 increased a strong 23% over the same quarter in 2008. This is a little more than we forecasted in a recent press release on Medicare enrollment.
Looking over what direct mail is being sent to consumers this year, most companies are using close derivations of what they sent last year. Some are using almost identical creative with only small changes to the text. This allows them to send full campaigns without the added cost of extensive design work.
Coventry Health Care Group, for example, is running a similar direct marketing campaign to last year. Letters seen in early 2009 had the text “1 – Be Healthy, 2 – Save Money, 3 – Be Independent” on the envelope, on a good-sized sidebar, and as icons for paragraph headers. These letters also included a “1-2-3 Comparison Quiz” so the consumer could think about how his or her plan measured up.
This year, Coventry is using much of the same creative, but they’ve moved things around to keep their direct mail fresh. A one-piece mailer we’ve seen features a “Medicare Plan Check List” that is similar to the quiz of last year. The mailing also repeats the 1-2-3 theme but it’s briefer and more straight-forward, better suited to the one-piece mailer format.
AARP/United Healthcare similarly uses the same letter as last year for its Medicare Complete product.
Aetna, as another example of this year’s campaigns, features lists and a worksheet in its Medicare letter. The direct mail campaign directs recipients to informational meetings to learn more about Medicare open enrollment.
Medicare’s regulated enrollment period does make testing new creative a challenge and a risk. With a limited amount of time to put mail out and approval required before a mail piece can be used, there are many constraints on testing a mail piece’s effectiveness. I imagine that’s why we see so many companies playing it safe with small modifications to last year’s direct mail campaigns.
Mintel Comperemedia forecasts more mail this quarter than what was sent out last year in the first quarter. I would anticipate roughly a 10% increase in Medicare acquisition mail, largely driven by the open enrollment solicitation effort and with modest changes to the creative used last year.