Tag Archives: denim

Social Media: Your Top Referral Source

Insurance agents and financial advisers who don’t have a strong social media presence could be missing out on a lot of potential business, according to a new study conducted jointly by Life Happens and LIMRA. The study found:

  • More than a third of Americans (34%) — and more than half of millennials (54%) — are likely to ask for recommendations for an insurance agent or financial adviser on social media.
  • 54% of millennials and 44% of Gen Xers are likely to check an agent’s or adviser’s social-media presence on sites such as Facebook, Twitter and LinkedIn.

“This year’s study reinforces the increasingly important role that social media has on an adviser’s marketing efforts,” said Marvin Feldman, CLU, ChFC, RFC, president and CEO of Life Happens. “Advisers and agents must ensure their profiles are regularly updated and provide consumers with quality content and information.”

At the same time, the study found, most consumers still desire a personal connection with a professional when buying insurance. Millennials are the most likely to want to meet with a financial professional before purchasing life insurance (73%), compared with Gen X (64%) and Boomers (69%).

How should we respond to these findings?

Below are three ways for insurance and financial services firms and their agents and advisers to make the most of these findings.

  • Invest in social media and mobile marketing (especially advertising). With so many consumers turning to social media to evaluate financial products and professionals, it is critical that agents and advisers have an active social media presence. And, with recent changes Facebook made to its News Feed algorithm making it harder for businesses to get into consumers’ News Feeds organically, it’s more important than ever to invest in ads.
  • Take a multi-channel approach. Consumers want to take advantage of both personal networks and professional help, online research and in-person guidance. Agents and advisers must present an “always-on” persona as consumers utilize a multi-channel approach to researching and buying insurance.
  • Connect personally — and locally. Meaningful, human relationships still play a critical role in the insurance and financial services industry. One of the best ways to create these relationships is to connect with people on a local level. Consumers may not have an intrinsic connection with a national brand logo, but they can create a tangible connection with an agent or adviser with an office down the street.

See also: 3 Useful Cases for Social Media  

What Comes Next for Mobile Ads?

A recent headline read, “Insurers go all-out on mobile, but what comes next is elusive.” But what if the future doesn’t have to be elusive?

The article shares some interesting statistics on Canadians’ use of mobile related to insurance purchases:

  • 74% begin their insurance research journey online.
  • 25% of those who begin their research online use a smartphone only.
  • 61% of this segment will immediately abandon a broker’s website if it is not considered mobile-friendly.

And it’s not just Canadians. A January 2018 Pew Research Center study of U.S. consumers found that as mobile devices have become more widespread:

  • 77% of Americans go online on a daily basis.
  • 43% go online several times a day.
  • 26% report they are online “almost constantly” (up from 21% in 2015).

As the article rightly points out, new findings on mobile behaviors like these require insurance and financial services companies to avoid assumptions and dig deeper into the various segments — considering demographics that include lifestyle, employment statistics, income and related buying preferences — in their marketing efforts.

However, what’s next doesn’t have to be elusive. Highly effective targeting based on these characteristics can easily be achieved through social media advertising. As we shared in A Brief Guide to Mobile and Social Media Audience Targeting, social media platforms allow marketers to target ads based on consumers’ locations, demographics, interests and behaviors.

See also: The Time to Adopt Mobile Was Yesterday  

But that’s not all marketers can do through mobile and social media advertising. The Denim platform allows corporate marketers to achieve micro-targeted, hyper-localized ads at scale on behalf of any number of agents or advisers. Why? Because an ad presented from a local agent’s Facebook page consistently outperforms the same ad presented from a corporate brand’s Facebook page.

Best of all, customers achieve better results at lower costs. This is apparent when you compare consumer engagement data on ads powered by Denim to Facebook advertising benchmarks for the insurance and financial services industry:

  • The average click-through rate (CTR) of finance and insurance ads placed on Facebook is 0.56%, while the average CTR of micro-targeted, hyper-local ads powered by Denim is 1.95%.
  • The average cost per click (CPC) on Facebook for finance and insurance is $3.77 — higher than any other industry. In comparison, the average CPC of ads powered by the Denim platform is $0.33.

See also: 4 Ways Social Media Can Win a Promotion  

Perhaps a better headline would go something like, “Insurers go all-out on mobile; what comes next is micro-targeted, hyper-local mobile and social media advertising at scale.”

Best of Both Worlds: Humans and Tech

There’s a lot of talk about how artificial intelligence (AI) will lead to the displacement of vast numbers of agents and brokers in the insurance industry. The truth is, while AI will automate certain processes, it will ultimately enhance — rather than replace — humans in the marketing and distribution of insurance.

“Human advisers are going to continue playing an absolutely critical role,” said Farron Blanc, VP, Innovation Studio for RGAx, at Denim Summit 2017. “When you go fully digital, the conversion rates are probably about 1% from seeing an ad all the way through paying the first premium. As soon as we put in a call center, we’re seeing — depending on the segment — a 30% conversion rate.”

There’s no question both humans and technology will play a critical role in the future of insurance. But what are the benefits only a human can bring, and what are things humans can’t do without technology? Let’s take a look.

The Human Value

Below are a few things humans bring to the table that technology can’t do alone:

  • Trust. As Chip Bacciocco, CEO of TrustedChoice.com, pointed out during Denim Summit 2017, insurance is, at the end of the day, a social contract and requires trust. “The real point of buying insurance is that you can go to sleep at night feeling like you did the right thing, you’re taking care of your family,” he said. “If you aren’t 100% certain you clicked the right button on that screen, and that real people are really going to pay your claim someday, you never really get to sleep.”
  • Accountability. Along with trust, any type of business or social contract needs someone to hold accountable. “You need to know who to talk to when something goes wrong. You need to know who your advocate is,” Bacciocco said.
  • Expertise. Let’s be honest: Insurance is confusing. Often, customers and potential customers need to talk to another human being who can empathize with their concerns and truly get at the heart of their questions. Agents and advisers bring years of expertise to the table that can help customers make the right decisions and give them peace of mind.

See also: Cyber: How to Fix the Human Factor  

The Technology Value

Here are the types of benefits made possible only when technology is added to the equation:

  • New markets. Technology makes it possible to reach new market segments. For example, RGAx looked at the needs of Hispanic remitters and found that a $7 per month insurance policy would solve a pain point for them: protecting their loved ones with remittances for two years if something were to happen to them. “How do you get humans to sell $7 insurance to people who really need it?” Blanc asked. “Technology is this great democratic leveler that allows us to reach new forces.That’s why it’s disruptive. It allows us to reimagine the value chain and serve people in whatever way they want.”
  • Personalization. There is an unbelievable amount of data available on consumers, especially when it comes to their digital behaviors. Recently, Denim announced we have collected more than 1 billion data points on consumer engagement with mobile and social media ads powered for insurance and financial services companies. Technology allows us to activate data to deliver highly relevant offers and personalized experiences to consumers.
  • Multiple channels. Not all consumers want to engage with their insurance and financial services providers the same way. Some would prefer to do everything face-to-face or over the phone, while others would prefer to do everything online. Still others will start the process online but then need to talk to a person to complete the request. Technology makes it possible for consumers to engage with providers in the channel they prefer, any time of the day or night.

See also: How Technology Breaks Down Silos  

Key to the future will be combining the best elements of human interaction with the best elements of technology to provide a superior experience to every consumer, every time.

Insurtech: How to Keep Insurance Relevant

In the age of the fourth industrial revolution, risks are changing. The advent of technology has made digital assets more valuable than physical ones.

In this scenario, the insurance sector has been increasingly left to deal with technological change and disruption and is having to reconsider the way it defines itself. Having had the opportunity to discuss this transformation in more than 15 countries, I have seen that insurtech is helping to redefine the way the insurance industry is perceived.

Insurance is about providing protection for people in life and in employment. It is about providing a contract where someone promises to indemnify another against loss or damage from an uncertain event, as long as a premium is paid to obtain this coverage – the concept has been around since 1347.

It’s unthinkable for an insurer today not to ask how to evolve its business architecture by thinking which modules within the value chain should be transformed or reinvented via technology and data usage. I believe all the players in the insurance arena will be insurtech – that is, organizations where technology will prevail as the key enabler for the achievement of the strategic goals.

See also: Core Systems and Insurtech (Part 1)  

Insurtech startups have received more than $18 billion in funding to date, according to Venture Scanner data. Fantastic teams and interesting new insurance cases have been grabbing the attention of analysts.

Full-stack insurtech startups are generating a lot of excitement in the investor community and attracting relevant funds, and some have achieved stellar valuations, with Oscar, Lemonade, Sonnet, Alan, Element, Zhong An some of the most fascinating players. It looks like the aim of disrupting the status quo, combined with a skepticism about the incumbents’ ability to innovate, is focusing the attention on players to create new insurance products.

A business model adopted by more and more players is the MGA/MGU approach (Managing General Agents/Managing General Underwriter), a way to satisfy investor appetite for players covering a large part of the activities in the insurance value chain and partnering only with an incumbent for receiving underwriting capacity. Trov, Slice, so-sure, Insure the Box, Root, Bought By Many and Prima are some examples of this approach.

I am positive about the ability of the incumbents to innovate, and about the potential for incumbents and insurtech startups to collaborate. This view is based, for example, on the impressive international success of players such as Guidewire and Octo Telematics. I believe service providers for the insurance sector will be more successful in scaling at an international level than the other models described above. This kind of collaboration is leveraging on the incumbents’ technical knowledge and their customers’ trust, which has frequently been underestimated by insurtech enthusiasts. The most relevant opportunity is the collaboration between incumbents and specialized tech players capable of enabling the incumbents’ innovation in the different steps of the business model.

Denim for the awareness, Digital Fineprint for the choice, Neosurance for the purchase, MotionCloud for the claims, Pypestream for the policy management – these are a few players innovating on each step of the customer journey, based on my map to classify the insurtech initiatives.

For insurtech startups to outperform traditional insurance companies, they need to have their business models concentrated in what I call the four axes (4 Ps): productivity, profitability, proximity and persistency.

An excellent example is Discovery Holding, with its Vitality wellbeing program. This has been replicated in different business lines and countries with different business models – they are carriers in some countries, operate joint ventures with local insurers in other regions and are a service provider in other nations. They are using state-of-the-art technologies such as wearables and telematics to create a model based on value creation outperforming on all the four Ps, enabling them to share value with their customers through incentives and discounts.

See also: What’s Your Game Plan for Insurtech?  

Insurtech adoption will make the insurance sector stronger and in that way more able to achieve its strategic goal: to protect the way people’s lives and organizations work.

Observations From InsurTech Week

InsurTech Week 2016 hosted by the Global Insurance Accelerator in Des Moines was a great experience. It is quite interesting to see the energy, excitement, new ideas and investment in the insurance industry. Brian Hemesath and his team at the GIA have done a great job of harnessing this activity and being a positive force for change in the industry.

There are two themes I would like to highlight. The first is that the ingenuity and sheer variety of the startups is astounding – and will ultimately be a great thing for the industry. The second theme, and perhaps the more subtle one, is that there is a collegial atmosphere and a common sense of purpose about the role of insurance in society and business.

See also: Insurtech Has Found Right Question to Ask  

Variety and Ingenuity

The 11 insurtech startups participating in this InsurTech Week are a microcosm of the larger movement. A few examples are illustrative.

  • Abaris – an innovative, direct-to-consumer solution for retirement planning, starting with income annuities.
  • Insure A Thing – an idea for a revolutionary new business model for insurance that includes making payments in arrears (post-claim).
  • Denim – a social media ad platform for insurance with a vision to ultimately reimagine marketing and distribution.
  • ViewSpection – a mobile app for DIY property inspections to help to inexpensively provide more information to agents and underwriters.

The other participants also had innovative solutions for various lines of business and addressed key business issues in insurance today. They are: Ask Kodiak, Gain Compliance, Montoux, InsureCrypt, Elagy, CoverScience and Superior Informatics.

Some are in the early stages. Some originated outside North America and may or may not enter the market here. Some may not even be approved by regulators in their current form. But that is true of the broader set of the hundreds of insurtech companies that are active today.

The main point is that there is a great deal of innovation here, and many of these companies will play a role in the evolution of insurance, one way or another.

Collegial Atmosphere

The founders and investors in insurtech companies certainly desire to make money. Insurers that are engaging with these firms hope to gain competitive advantage. But in keeping with the culture of the insurance industry, there is also a great atmosphere of collaboration and even a sense that there is a higher purpose.

I don’t want to sound too dramatic, but there is a sense of altruism here – a sense that there are great opportunities to make the world a better place. Many of the insurtech companies see opportunities to improve safety in homes, in businesses, in factories and on the roads. The potential to significantly reduce accidents and deaths is tangible. Providing new services and capabilities to enhance lifestyles, improving individual well-being and just making it easier for customers to do business with the industry are also common purposes.

There is a spirit of cooperation among insurers, insurtech and other industry players, even in cases where companies are competitors. Not to criticize other industries, but insurance is about a lot more than selling a widget and making a buck.

See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections

A Bright Industry Future

Overall, I believe this is cause for optimism for the insurance industry. It is not easy to transform from today’s business models, processes and systems into a future that embraces all the new ideas coming from insurtech. But many in the industry are now actively involved in building strategies, experimenting with new ideas and technologies, launching ventures and generally being willing to think differently.

While many industries are being disrupted, insurance is more likely to morph into a better version of itself, with incumbent players learning from and partnering with new players.