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
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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 [email protected]
www.morethan.comwww.hortal.com
All photos: Flickr users via FlickrStorm
