The affinity market has historically been a thriving sector of the insurance industry — an uncomplicated, easily understandable model consistently meeting customer needs. As time has gone on, however, it has evolved into a more transactional process. If it weren’t for new insurance models and the digitalization of nearly all interactions, the affinity insurance market could very well exist as it is.
However, the consumer landscape is changing. The Millennial and Generation Z cohorts, both of which possess immense buying power, engage with media much differently than previous generations. They consume it at unmatched speeds and across multiple devices — sometimes simultaneously. With this new digital connectivity, instant gratification has become a dominant trait. Consumers now expect fulfillment without delay, and that includes when they shop for products and services within the affinity insurance market.
Traditional distribution models are no longer enough to meet these demands. Insurers must shift to digital alternatives and align themselves with affinity marketing partners that understand how to integrate insurance offerings within customer engagement efforts naturally.
Failing to do so will leave insurers open to emerging threats. In fact, according to PIMA’s research with Majesco, Millennials and Gen Zers would consider purchasing insurance from tech enterprises like Amazon, Apple, and Google. A partnership with the right organization could prove beneficial to competing with these companies.
Meeting Customer Needs by Returning to Simplicity
While forming partnerships and meeting customers where they are is a step in the right direction, affinity marketing must do more than merely generate leads. It should move toward making insurance products easier to understand, simpler to use, and more personalized to the individual. It’s all about returning to simplicity and improving the overall customer experience.
Data is essential to this process. It can offer a clear view of the customer, helping to add a more personal and predictive quality to each interaction. Insurers can not only quickly identify a target audience, but also more thoroughly understand consumer needs and then tailor their messaging and offerings to deeply resonate with individuals. The transactional nature of distribution becomes much more relational — as it should.
With choice and convenience in abundant supply, it pays to invest in new insurance models as well. Digital channels are already known for driving engagement, but they can also add value to the customer-insurer relationship. On-demand services become possible. The same can be said for virtual assistance, frictionless purchasing options, and immediate delivery. When distribution is easy to use and obstacle-free, insurers are no longer in the position of “selling” insurance. Instead, they can offer quotes and coverage at the point of need and on the go, which is much more sustainable and scalable from a business perspective.
As far as affinity marketing partners go, the State Farm and Ford partnership offers a standout example. The companies came together to offer an innovative yet simplified process for insurance distribution. Using telematics and connected data available from certain Ford vehicles, consumers can choose user-based insurance (UBI) through State Farm’s Drive Safe & Save program. Instead of basing premiums on just car model, price, engine size, and other standard variables, miles driven is also calculated into the policy.
It’s clear that insurance is no longer a seller’s market. Consumers control the relationship. Those working in the affinity insurance market must meet consumer expectations on everything from insurance products and distribution channels to engagement and experience. Move to a seamless process, explore new insurance models, and employ a multichannel approach, even mixing the new with the old. The time is now to embrace simplicity. It’s the key to affinity.
For more information on connecting with affinity partners, follow PIMA on LinkedIn.
Published on March 3, 2021.
PIMA® (Professional Insurance Marketing Association®) is a member-driven trade association focused exclusively on the group-sponsored benefits market.