Marketers play a pivotal role in the success of insurance carriers, but that success is under threat. Profitability is at risk because the marketplace is highly competitive; many policyholders shop and switch to a new carrier long before the original carrier is able to recoup the cost of acquisition.
To understand the dynamics of the marketplace, LexisNexis Risk Solutions surveyed marketers, underwriters and product managers at the top 50 auto, home and life insurance carriers and found that, to succeed, marketers and underwriters need to be on the same page. The study uncovered three key takeaways, which can help these teams overcome their challenges and improve their overall acquisition and retention success rate.
1. Understanding Insurance Team Responsibilities Improves Results
It should come as no surprise that insurance marketers are distinctly different from their underwriting and product management counterparts.
While profitability was the No. 1 metric for all groups in the survey, marketers identify cross- and up-selling to current customers, meeting sales quotas and retaining customers as their top three goals. Underwriters and product managers also identified these three objectives as top priorities for marketers.
Conversely, underwriters and product managers identified their own top goals as enhancing existing products and creating new ones. Likewise, marketers agreed these were the most important goals for underwriters and product managers.
See also: How Acquisitions Are Reshaping Landscape
While it is reassuring that both camps have a clear understanding of each other’s top priorities, an interesting disconnect that emerged from the study was that only 18% of marketers nominated "obtaining an optimal spread of loss exposures" as a core business goal for themselves, and 43% of project managers and underwriters nominated "obtaining an optimal spread of loss exposures" as a core business goal for their marketing counterparts. Does this suggest that underwriters and product managers want marketers to be more driven by obtaining an optimal spread of loss exposures?
2. Collaborating Is Essential
While many marketers recognize the need for cross-functional collaboration, far fewer excel at actually doing it.
As part of the research, the respondents were quizzed on their relationships with counterparts. The results were clear: 94% of respondents said that working more collaboratively was either “extremely important” or “important.” This suggests a willingness to embrace closer working relationships to achieve business goals.
However, this resounding endorsement for working hand-in-hand seems to be contrary to reality. Only four of 10 teams reported that they build their strategies together.
Given the challenging market dynamics, it seems counterintuitive for these teams to recognize the value of collaboration yet fail to embrace it within their organizational culture. So, what’s going on?
3. Teams Need to Be in Sync for Customer Acquisition and Retention
Insurance marketers live in an imperfect and challenging world. Not every acquisition strategy will draw all the right customers. Nor will every retention program keep valuable policy holders. However, the survey's results were eye-opening: 43% of marketers said they were not completely satisfied with how underwriters and product managers executed acquisition and retention strategy, and 46% of underwriters said the same of marketers.
See also: Underwriters Need Some Power Tools
While neither group disparages the other’s performance or efforts, the results clearly show that both camps are eager for improvement.
Through collaboration, marketers are better able to target policyholders with retention in mind. Acquiring longer-term policyholders delivers the promise of greater opportunity for profitable growth for carriers.
Clearly, cross-functional collaboration is rapidly becoming a strategic imperative within the insurance industry. The good news is that teams are willing and eager to embrace it in pursuit of high-return opportunities and to achieve the greatest value from that collaboration.
At the end of the day, it’s one team both on and off the field. And increased collaboration between marketing, underwriting and product management teams allow all teams to better align their strategies for more profitable growth.
For more information, please refer to the white paper Collaborate Across Function to Acquire with Retention in Mind.