Roberto Hortal The Future Of Insurance Digital Marketing

Insurance Marketing Online

Roberto’s views

Roberto Hortal

Head of eBusiness

A promising start

• Direct insurance brands launch sales sites between 1999 and 2002

• Online discounts reflect absence of commissions

• No separate marketing: TV, outdoor main product marketing channels

• Motivation: lower total costs + don’t get left behind

A promising start

Source: E-Commerce Inquiry to Business 2000 – Office for National Statistics

Penny-pinching

Secondary, cost-reducing, simple sales channel

Online able, not online centric

Built on

Legacy Systems and

Products

Just one online-onlycompany

2004 - 2007

Insurance so far

The Financial Services Marketing mix

• We love TV!

• DR traditionally fromdirect mail

• Online Marketing getting attention

– Over 60% sales online, just 15-25% spend

– Saturation in other channels

– Supporting/replacing offline DR channels

– Measurability, flexibility, reach

BUY!

Sources: eBenchmarkers October 2007 report / Internal research

Making the tills ring

Online Motor Insurance May-Oct 07

• 2.1M online sales

• Double-digit increase YoY

• Majority of all sales – share of online sales up 20% YoY

Source: eBenchmarkers October 2007 report

Big online spenders

• >£110M spend YR to Oct 07

– 40% increase YoY

• Traditional businessmodel supported large CPS(£34 - $165 across peer group)but customerbehaviour ischangingfast!

Updating insurance

Products and services

Getting it right

• Online extensions to product– Green wheel

• Online mastery– Back to basics: user experience

• Engaging with customers– Living

• Leveraging the brand– Nodding dog

– Aviva/NU preparing an aggregator?

Getting it right

• Online extensions to product– Green wheel

• Online mastery– Back to basics: user experience

• Engaging with customers– Living

• Leveraging the brand– Nodding dog

– Aviva/NU preparing an aggregator?

Updating insurance

Engaging with our customers

Popular

Source: iCrossing

morethan

long egg

morethan living

summer 2007 floods

flood advice

green social networks

green motoring

flooding summer 2007

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Engaging

Source: iCrossing

Every piece counts

• Products designed for loyalty– Multicar makes it difficult to leave

– 2 months free when you renew

• Fighting commoditisation

• Opportunity keeps growing– 32M Britons online (75% more than 2001’s 18M)

• The world is bigger than your site

The newIntermediaries

Aggregators

Eroding customer loyalty

Price transparency, commoditisationcashback incentives

Aggregators and consumers

• Save lots of time

• Save money every year

• Expand reach

• I’m in control

Aggregators andinsurers

• Changing the game

– From brand list to price shortlist

– Commoditisation

– Pricing transparency

– Adverse selection risks

• Significantly affecting loyalty

• A race to the bottom

– Agg-centric no-frills products

Source: eBenchmarkers October 2007 report

Resistance is futile?

The Aggregator effect

Saturated market: always growing spend to maintain share of voice

Aggregators + new branded entries increase competition for attention

2006

2008

Coming soon toa business near you

Everyonewants in

Aggregators:what next?

• Specialisation/positioning

– Different premiums = customer segments

– Different product ranges

– Different propositions (price/value/platform)

• Peak Agg?

– Mature market - 65%+

– Share battles - £1M giveaway, win a Boxster

– Cashbacks threaten revenue

– Consolidation, regulation maybe imminent

Aggregators:what next?

• Could kill the Golden Goose

– Long-term sustainability of insurersat risk

– Race to the bottom may leave consumersunprotected

– Shrinking competitive landscape?

Aggregators:what next?

• Or make it stronger

– Back to basics of direct model

• Lower cost at all stages

• It’s the Customer Experience, stupid

– Customer at the core: reinventing insurance for today’s customer

Aggregators:what next?

Cashback sites

Cashbacks and consumers

• Consumers get rewards everytime they use a cashback site– Up to 100% of site’s commission

– Down to £0 joining fee

• Cashbacks offer forums, blogs for members to discuss merchants– Payment terms/speed most popular

– Service/product review/recommendation growing

• Spreading like wildifire thanks to excellent MGM programs

Cashbacks and retailers

• Taxing access to consumers - la famiglia of the online Marketing world?– Not really a demand generation tool

– You still have to do all the hard Marketing work, and spend all the money

• Large volume cashbacks candrive high bounty

• Purely an added cost

• They are spreading!

Cashbacks and retailers

• High additional CPS across the board

• Selection, profitability impact– Bounties for Insurance products tend to be flat

• Disproportionate benefit for low premium policies

• Will Aggregators bear the brunt of the cashback revolution– Not completing the sale?

– Having to offer cashback?

• Commercial value doubtful

Who are these people?

Source: MoneySavingExpert

• Immature

– Basic category lists

– Evolving, eroding model (100%, no fee)

• Inefficient

– Operating through (expensive) affiliate networks

• Massive recent growth

– Quidco: 3x traffic in 9 months

– Up to 30% affiliate sales

• Media darling

– BBC, GMTV, Five, Radio 4

• Bandwagon

– MS Search to offer cashback in US

Social Media

• The biggest opportunity in online marketing

• Participate in conversations

– Listen

– Change

– Communicate

• Your customers on the driver’s seat

Popular

morethan

long egg

morethan living

summer 2007 floods

flood advice

green social networks

green motoring

flooding summer 2007

0

100

200

300

400

500

600

700

800

900

0 1 2 3 4 5 6 7 8

Ave

rge

tim

e o

n s

ite

Average pages per visit

Top 100 keywords over all time

Engaging

Not bad for £0 marketing

but...

Cashbacks are better social media!!

• WOM fuels growth – social media marketing working at last!

And rather good at it...

Cashbacks: Dive in

• Very large audience of committed users

– No shortage of enthusiasts of your brand

• Huge collection of user-generated content

• Finely tuned WOM program

• A social Marketer’s dream!

3 final thoughts

• Mastery

– Back to basics: the user experience

– Get the best people available

• Where will your brand take you?

• Mobile. It’ll happen, just not as we’ve been told

Thanks!

Roberto Hortalroberto.hortalmunoz@uk.rsagroup.com

www.morethan.comwww.hortal.com

All photos: Flickr users via FlickrStorm