Posts Tagged ‘Insurance’

Auto insurance TV ads more creative; direct mail lagging

Friday, August 13th, 2010

While I follow the insurance direct marketing industry, I can’t help but feel a little envious of what I’m seeing on television. At least in the Chicago area, where I sit between the two largest auto insurers Allstate and State Farm, I seem to be seeing more auto insurance commercials.

Earlier this year, Advertising Age reported that in 2009, GEICO out-spent the next highest auto insurance advertiser, Progressive, by more than 60 percent. Both State Farm and Allstate, who spend on parity with each other, spent less than half that of GEICO.

Progressive
Progressive’s concept of an insurance company as a consumer package goods superstore is continuing with Pickles, the dog, teaming up with Flo to provide a comparative quote. You can’t go wrong featuring a cute animal. Flo is now playing second banana and providing a voiceover as the commercials end with a shot of Pickles in charge.

GEICO
The Gecko has a long history with GEICO and his new commercials take advantage of his steady development as a spokesperson. No longer is he casually talking about pie and chips to a real gecko, as he did in one of his first commercials. Now he is talking in front of conference audiences with all the giveaways branded in his likeness. Like Progressive’s Flo, GEICO is capitalizing on a developed brand image.

Esurance
Still working to develop an image, Esurance seems to have placed secret agent Erin into deep cover as they now use a small group of dedicated employees who talk about their interactions with Esurance customers. Whether it’s The Saver or the Coverage Counselor, this cast of spokespersons grabs attention by playing out short stories on the experiences of being an Esurance customer.

Both of today’s leading auto insurers stick with the real life spokesperson format. Together, State Farm and Allstate challenge Progressive and GEICO’s messages of saving money and fast quotes.

State Farm
State Farm has developed its spokesman into the customer’s friend who reminds them to check whether their friends and family are one of 40 million State Farm customers. Then he one-ups the competition by telling the audience that State Farm is larger than Progressive and GEICO combined.

Allstate
Similarly, Allstate continues to rely on Denis Haysbert as the spokesperson for most of their commercials. In a new campaign he supports Dean Winters, portraying Mayhem, in a series depicting causes of accidents. Allstate, like State Farm, challenges GEICO’s message by asking if a fifteen minute call could provide the service you get from your personal agent.

It’s clear that these five companies are spending a lot on the development of new brand images. Apparently the money is coming from their print advertising since Adweek recently reported that the auto insurance industry reduced its print spending by 26 percent in 2009. Some of that decrease may include direct mail, which Comperemedia reports as having decreased five percent last year from 2008.

These five companies can be split into two groups when it comes to direct mail strategy. Both Progressive and Esurance have nearly stopped mailing. Of the others, GEICO is still the largest mailer, not segmenting who receives a solicitation, while Allstate and State Farm maintain strong mail levels and utilize their agents to guide the segments on address labels.

When I look at auto insurance direct mail, I’m surprised how different the pieces are from the companies’ commercials. There’s a dysfunctional integrated marketing strategy, a direct marketing channel disconnect. The images these companies are investing in and creating on television are not being leveraged in their direct mail solicitations.

I would think it would be an advantage to incorporate the TV brand images into mail campaigns as a reminder of the company’s brand values. After all, the advantage of advertising is it builds the brand through repetition of a message.


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Delayed MLR rules could negatively impact insurer’s planning

Thursday, July 29th, 2010

I’m concerned about the recent delay in setting rules for the medical loss ratio (MLR) provision of health reform. With the implementation set for January 1, 2011 there is not much time for health insurers to develop their plans for next year.

Under the health reform rules, insurers are required to spend 85 percent on medical care for every premium dollar received from group plans, and 80 percent for premiums received from small group and individual plans. HHS (US Department of Health and Human Services) is charged with managing the development of the rules and guidelines. It has asked NAIC (National Association of Insurance Commissioners) for their recommendations on how to calculate and implement the MLR requirement. They have missed their target of June 30, 2010 to have rules in place. In their defense, it is complicated.

Because of the delay, a political fight is developing over the issue. Senator Al Franken is calling for vigilance to make sure the insurance industry doesn’t define medical expense as everything that is not profit. He has cited the recent announcement by Wellpoint to reclassify $500 million in administrative expenses such as health and wellness, nurse hotline, smoking cessation and weight loss programs as medical.

I’ve noticed in Comperemedia a recent letter to Assurant producers notifying them that, because of the uncertainty of the MLR rules, Assurant will reserve the right to change commissions for next year and is placing a temporary limit on first year commissions. With this uncertainty stretching well into next year’s planning cycle, I’m wondering if it is more than simply constraining planning or if it is having a material affect? More importantly, has the concern about MLR’s impact on commissions caused policy sales to slow?


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Q&A from “The Insurance Marketing Mix: Social Media’s Effect on Direct Mail”

Thursday, July 1st, 2010

Thank you to everyone who attended my webinar yesterday on the impact social media is having on insurance marketing. If you missed the live webinar but you’d still like to download a copy of the slides and/or recording, click here.

Listeners asked a good number of thought-provoking, intelligent questions so I’ve answered them below. Please, if you think of any further questions, feel free to contact me at dhayes@mintel.com or visit www.comperemedia.com.

Where is Allstate in the flow of Social Media?

Allstate has developed its presence as well. I chose to focus on State Farm because they captured my attention with their focus on both the young and Spanish-speaking markets. Allstate actually has more followers than State Farm on their Facebook page. And Allstate is doing a good job of placing information on their page to keep followers informed about hurricane Alex.

Are social media comments posted by the public on insurer websites considered to be advertisements by insurance regulators? If the answer is yes, does it apply to all posted content or just the ones that the company might use in its advertisements?

Good question. Since social media is generally an open forum when someone says they think a product is great, it’s somewhat out of the control of the company. Yet these comments could be considered testimonials and should be restricted. I’m not aware of any rules on this. At this point I think most companies are being cautious by monitoring what is posted and may be taking down comments that are too specific.

How do companies define and manage the risks associated with SM? Most employees don’t attempt to do direct mail, for example, but many of us are on SM.

Companies are starting to develop guidelines for the use of social media. The basic rule of thumb right now is to “act professionally.” You are right, once an employee puts the company on their Facebook or Linkedin page, they will be viewed as a representative of the company and that could present problems. So they should be reminded that they should not do anything that they would not do in a presentation to clients.

Do you feel the Humana independent social media development is a good idea?

It’s a way for them to control who has access to their content. It could have the same familiarity as traditional social media tools. A drawback to limiting access is the loss of exposure to potential new clients.

Do you see social media connecting toward business offers just like direct mail does? Or avoiding “to much” of a business approach?

For now I recommend avoiding a direct sales pitch as the best approach on social media. The use of social media is still primarily entertainment and keeping connected with friends and family. But behaviors change. As the use of social media tools become more sophisticated, consumers may become more accepting of a sales message.

What tracking matrices do you see happening or being particularly effective?

The number of unique visitors, where they come from, how long they stay, and certainly if they request a quote are all important stats to capture.

How are SM efforts well suited to “going green” vs. DM?

Unless someone is printing all of the posts they write and receive, and assuming that people properly dispose of old devices, there is no doubt that social media lowers the carbon footprint of marketing.

How is State Farm leveraging Social Media at the agency level? How can they control the content from their exclusive agency force?

I see a lot of State Farm agents with their own URL listed on the direct mail piece. I’ve noticed that State Farm agents are often part of community boards and volunteer efforts. I think these same skills are easily transferred to social media behavior

How can an insurance company that markets through a business/association entity use social media?

You can help support the business/association by providing content to support their efforts to create a presence through social media tools. If the insurance company wants to maintain a behind the scenes role the best thing it can do is help make their representatives as relevant as possible. You should do all you can to help build up the social media reputation of your producers to get noticed on the internet. The best way to do this is to feed them fresh and interesting content for them to post on their site.

When do you expect Health Care reform to impact DM volumes? Early 2011 or yet this year?

I definitely think a change is going to happen this year. Medicare is going to change the mailing cycle around enrollment. But for individual health policies, I don’t think there is going to be a major change this year or next.

How costly is it to “develop your own tools”?

Developed tools can vary from an iPhone app to an entire new internet presence. The costs can range from what is required to customize a vendor’s standard product to ground up development. There is also the consideration of maintaining the new tools with current staff, additional staff or outsourcing.

Could anyone explain any best practices observed in types of direct mail (postcards, letters) and what would be a good way to using this channel in order to direct traffic to social media?

There is an easy first step. Put the fact that you have these tools available and how to get to them on the direct mail piece. I’m still surprised how seldom this information is printed on the mail piece. I think direct mail is going to remain very important, but it can also be used to drive consumers to a website and social media tools. Make the information in the mail interesting, something the recipient may want to hold onto. Not too much detail is needed. Let the details become something the consumer will be curious about and a reason they will want to visit your Facebook page or website. And if you can, incorporate some type of participation. If they can vote for a charity or personally get involved, they may spread it around to their friends.

How do you guys see companies best using Twitter?

This is why I liked the example of New York Life tweeting about the Big East Conference. This is a way of creating an event—something for people to participate in that gets them to associate your brand with an event they will remember.


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Social Media & Insurance Webinar: June 30, 2010

Tuesday, June 22nd, 2010

Please join us for a webinar entitled “Insurance Marketing Mix: Social Media’s Effect on Direct Mail” with Daniel Hayes, Vice President of Insurance Services at Mintel Comperemedia.

June 30, 2010
2pm CDT / 3pm EDT
Register Here: http://bit.ly/bMwxY2

Mintel Comperemedia—which tracks direct mail, email, online and print advertising—has seen insurance companies and producers beginning to participate in social networking for business gain. Insurers are trying to catch their customers and potential customers in the right place, at the right time…and right now, they’re finding them on social media networks.

During this webinar, Daniel Hayes will examine the use of social media by insurance companies and the effect it will have on the role of direct mail as a trusted marketing tool. Expect to:

- Explore the way social media is changing insurance direct marketing as a whole
- Identify how insurance companies and producers are changing the way they communicate with customers
- See examples of how insurance companies are mixing direct mail, email, print and online advertising
- Examine marketing messages that are designed to strengthen brand value

Mintel Comperemedia’s PR team recently put out a press release about how insurance providers are inching their way into social media. Read that release here: http://bit.ly/bOJ209

To learn more about Daniel Hayes, please read his biography and some of his recent blog posts: http://www.comperemedia.com/blog/daniel-hayes/


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