• New entrants developing client-centric offerings sitting between the carrier and the client, displacing traditional agents with a digital experience model
• Start-ups providing B2B solutions to carriers or distributors, addressing pain points in the traditional product and sales model
• Carriers themselves, a number of whom are experimenting either in the market themselves or via investments in start-ups or accelerators

• Establish presence and meaning for their brands among client segments whose unmet needs can be supported by the business model, creating differentiation and marketplace advantage.
• Extract insight from wide sources of data, many not used at all today within the industry, to drive product development, client segmentation, personalized offers and communications, a client journey built upon new models for distribution, servicing, payments and account management, or a pivot from protection to prevention - all with heavy focus on digital possibilities
• Avoid naivete about the inherent complexity of this industry, starting with:
  • Managing the reality of 50 states’ worth of regulation plus federal oversight from multiple agencies
  • Adhering to tight compliance requirements
  • Assessing the financial and risk implications of claims that won’t occur for decades
  • Recognizing that people are irrational to some degree when making financial decisions
  • Having patience (and patient investors) as even new entrants will be affected by sector dependencies and client dynamics that may take years to evolve

• The traditional agent model is riddled with issues, e.g.:
  • A continuous decline in the agent workforce,
  • A mismatch between agent demographics and overall population trends,
  • A prospecting model out-of-touch with the times, and
  • A compensation model that encourages churn and does not align interests between the agent and either the carrier or the client

• automation solutions to ramp up agent engagement in digital channels (website and mobile app development, social media, compliance, content development, marketing campaign management),
• hand-held device-based data capture and submission for policy applications; and
• improved underwriting and application processing for faster approval, reducing error rates and minimizing or eliminating the need for applicants to provide blood and urine specimens.

• Demonstrating real knowledge and expertise in the vertical.
• Connecting the dots between their solution and drivers of financial success, especially the core metrics against which the industry and the analysts have historically measured performance.
• Having a constructive attitude – no one wants to hear that the sky is falling, especially executives and advisers within striking distance of their own retirement.

• Advisers – whether captives or third party – have the direct relationship with the client and tend to maintain connections only with top clients who represent additional sales or referral potential.
• Client relationship management - Carriers transact infrequently with clients or their beneficiaries – contacts focus on premium notifications, claims and questions about policies.
  • Even when clients or beneficiaries reach out, most carriers are in the early days of figuring out responses beyond answering the immediate question.
  • Across the industry, there are millions of clients referred to as “orphans” – people whose agent has died, retired or is no longer affiliated with the carrier. Even if “assigned” to another agent, these clients do not have strong relationships with whoever issued their policy.
  • Carriers have not done a good job understanding their clients and how to improve the effectiveness of these relationships based on behavioral segmentation or other proven tactics. In the language of the carriers, “in-force management” is a relatively new area of focus, driven initially by risk and expense reduction strategies, with some signs of effort to improve client loyalty and satisfaction.
• Capabilities – Ranging from basic automation to big data to digital and multi-channel experience platforms, e.g.:
  • data management platforms that unify disparate data sources, making them useful in one, dynamic dataset, speeding up execution, as well
  • data analytics, e.g., to enable active and relevant product migration as well as additional sales. product development and exploration of new business models
  • integrated experience for agents and clients across channels
  • data security enhancements
  • e-document management

• The dependency on agents and advisers to drive sales, which makes any direct-to-client conversation controversial, as it may be perceived as competitive with the sales force
• The diversion of attention in life insurance C-suites right now to address the recent U.S. Department of Labor decision on fiduciary standards. The impacts of this ruling are significant.

Last spring, Chinese customs agents seized 70 kilograms of the narcotics fentanyl and acetyl fentanyl hidden in a cargo container for Mexico. The synthetic opium-like drugs were so potent that six of the agents became ill after handling them. One fell into a coma.

Because of the risks of addiction, abuse and misuse with opioids, even at recommended doses, and because of the greater risks of overdose and death with extended-release opioid formulations, reserve Fentanyl Transdermal system for use in patients for whom alternative treatment options (e.g., non-opioid analgesics or immediate-release opioids) are ineffective, not tolerated or would be otherwise inadequate to provide sufficient management of pain.

It seems like you can’t watch television for 10 minutes these days without hearing a sneaky gecko, a suit-clad man named Mayhem or Progressive’s Flo pushing insurance. Insurance ads like GEICO’s bring some humor to your between-show times, and they're definitely better than those psoriasis medication ads. But what’s not so funny is that policyholders are spending billions to broadcast those messages across the airwaves. 

Now, with auto insurance premiums rising faster than they have in nearly 13 years, more drivers are asking why they’re paying for insurers to outspend every other American industry on ads by nearly 8%. In my opinion, it’s a fair question — especially considering that there are better ways to earn satisfied policyholders. 

Ads Don’t Make Happy Customers 

In 2014, S&P Global (formerly SNL Financial) analyzed auto insurance advertising spending and found that GEICO led the pack, spending almost $1.2 billion annually, closely followed by Allstate at more than $937 million. Those figures keep climbing, but do they translate to better service? 

The Consumer Federation of America broke down the ratio of advertising to premiums and found that GEICO spent 6% of its budget on ads in 2013, while Allstate spent 5.7%. Interestingly, Allstate’s recent earnings report showed its net income fell by almost $1.2 billion from the first quarter of 2015 to the first quarter of 2016. GEICO, not to be outdone, had one of its worst years on record in 2015. 

When it comes to customer satisfaction, though, the big spenders aren’t winning. When Reviews.com weighed the nation’s largest auto insurance companies for dependability, financial standing, reliability and customer focus, it was Amica and State Farm that came out on top. What do Amica and State Farm have in common? They’re both policyholder-owned. 

So while investor pressures have put stockholder-owned GEICO and Allstate on top for ad spending, they’re not pleasing customers like mutually owned Amica and State Farm. 

See also: How to Redesign Customer Experience 

There are plenty of differences between mutual companies and investor-owned insurance companies, of course, but a big one is how they spend profits. While policyholder-owned insurers also purchase ads to tempt new customers, they — unlike stockholder-owned insurers — return a chunk of their profits to members in the form of dividends or reduced premiums. 

Cut Ads, Not Service 

Mutual companies have shown that it’s possible to contain — even to reduce — costs while still satisfying customers. After all, when was the last time you saw an Amica ad on television? 

The first — and perhaps most important — step to keeping rates low is to reduce customers’ exposure to risk. Our company recently tightened its underwriting guidelines to contain claims and allow policyholders to benefit from the cost savings. It’s a difficult decision that can hinder sales, but it’s the best way to keep costs low for everyone. Next, find ways to get your name out there that benefit existing policyholders. 

In lieu of ads, we conduct programs called brand energizers that reward the affinity groups we serve. Nurse’s Night Out, for example, treats our life-saving policyholders to an evening of fun, while our Work Hard/Play Hard sweepstakes are a great way to build word of mouth while rewarding customers who are first responders. 

Reward programs are just one way to build your brand without ads. We’ve developed a team of field marketing managers, our brand ambassadors, who make appearances at schools, educational events and other local groups to explain the benefits of our policies. This model costs much less than a national television ad campaign while building our reputation in the communities we serve. 

Hiring captive agents, too, is a good way to structure teams in a way that boosts service, not costs. Our account consultants are rewarded for bringing in new accounts, as well as for their retention efforts, and they’re not tied to particular clients. This creates incentives to provide world-class service to every potential client they encounter. 

See also: Spending on Agents Beats Spending on Ads 

Don’t forget the value of a strong retention program, which captive agents can help with. Happy customers are loyal customers, and the cost of retaining a customer is much lower than earning a new one. According to Bain, a mere 5% increase in customer retention could garner your company as much as a 95% profit increase. 

A focus on retention also builds brand champions who are willing to tell others about their experience. Wouldn’t you rather hear a neighbor’s recommendation than a gecko’s sales pitch? 

Lastly, build a strong surplus to protect yourself against unexpected losses. If a tornado strikes, you’re only as strong as your reserves. Invest in this surplus so you can weather disasters without raising policyholders’ rates in their time of need. 

When I started working in the industry, I rarely saw an insurance ad on television. I’m now sick of them, and I know customers are, too. To keep policyholders happy without dropping billions on ads, try it the old-fashioned way: Cultivate strong relationships and even stronger reserves, focus on retaining customers and build a team of brand advocates. Maybe you — and all of America — can then get back to watching your show in peace.

1. Flood insurance premiums should be priced to accurately reflect risk. Premiums reflecting risk inform individuals as to the hazardousness of the area and encourage investment in cost‐effective adaptation measures.
2. Issues of affordability should be addressed, but not by subsidizing insurance premiums. Many low‐ and middle‐income homeowners living in older homes in flood‐prone areas are not able to afford flood insurance if premiums are priced to reflect risk.

• South Carolina’s Omnibus Coastal Insurance Act of 2007 created the Safe Home grants program for low‐and middle‐income homeowners to retrofit primary residences against high‐wind and hurricane damages. Families making less than 80% of the county median household income and with home value below $150,000 qualify to receive as much as $5,000 in non‐matching grants. Families with income above that threshold and home value less than $300,000 are eligible for as much as a $5,000 matching grant. From 2008 to 2011, the Safe Home program awarded 2,500 grants totaling $12.1 million.
• The Residential Retrofit Tax Credit provides state income tax credits of as much as $1,000 for expenses incurred when retrofitting a home against natural disasters. From 2008 to 2011, 670 Residential Retrofit Credits have been claimed, totaling $781,106.
• The South Carolina Excess Insurance Premium Tax Credit allows homeowner to claim as much as $1,250 in state income tax credit against excess premium paid on property and casualty insurances. Excess premium is defined as the portion of the premium greater than 5% of the taxpayer’s annual gross income. Additionally, the state offers Catastrophe Saving Accounts, which are interest‐bearing accounts not subject to state income taxes if funds are used for qualified catastrophe expenses.

• Return to work within a few weeks of the injury, typically to their pre-injury employers at the same jobs and pay as before the injury
• Receive their first income benefit payment in 30 days or less from the time that the payer is notified of the claim
• Report that they were satisfied with the overall medical care received, including the time it took to have the first non-emergency visit with a provider and access to the desired medical services

• 75% to 85% of workers had less than one week of lost time^[1]
• 80% to 90% of workers had four weeks of lost time or less^[2]
• 85% to 95% of workers had six weeks or less of lost time^[3]
• Only 5% to 10% said they earned a lot less when they first returned to work (for those who returned to work)^[4]
• 87% to 95% said they returned to their pre-injury employer^[5]
• Half of those changing employers reported that the change was not due to the injury^[6]

• 40% to 50% in 14 days or less from the time payer was notified of injury
• 60% to 75% in 30 days or less

• 75% to 85% reported somewhat or very satisfied^[8]
• 85% to 90% reported no problems or small problems getting desired care^[9]
• 80% to 90% reported being somewhat or very satisfied with the time it took to have the first nonemergency care^[10]