Insurance products: What are the concerns of different consumer groups?

Insurance tends to be something people keep at the back of their minds. If some of us could have our way, it ideally would be entirely out of mind.

We recently conducted research analysing the different consumer segments and their views on insurance. We collected data from Lemonade, an American insurance company. Lemonade delivers insurance policies and handles claims through chatbots on their desktop and mobile apps. Its business model includes giving underwriting profits to not for profits as per the customers' choice. This is done annually in an event Lemonade calls "Giveback".

We extracted 1300 social media posts from Twitter and Reddit, as well as over 400 reviews. From this data, our cultural analytics enabled us to identify 3 key segments.

Lemonade’s consumer segments: who are they, what do they hope to achieve, what worries them?

Family Drivers:

These customers are usually millennials with steady jobs who enjoy contributing to social causes (e.g. donating to charities) and travelling, but have mixed feelings about the latter, since they can easily feel homesick.

As a whole, they are extremely keen on being with their family (hence why they’re not as engaged socially), and keeping a secured home. They commonly seek homeowners/renters and pets insurance policies, and hunt for the best comprehensive deals, which are less risky. Ultimately, this segment is looking for a one stop solution for their various insurance needs.

They want to ensure there are no adverse financial implications in whatever they choose, but they still prioritise safety and well being of their family over price.

These affectionate spirits can become loyal customers with a secured insurance claim coverage and an uninterrupted, reliable customer service.

Family Drivers are looking for wide-ranging solutions that address their multiple life stage needs. The idea of donating to charities really resonates well with them. A company that has a selfless image due to their practices and that fully attends their needs, can drive loyalty and lifetime value. Businesses must consider providing bundled solutions, easy add on abilities, unique pet specific options, as well as a message that is caring, protective and dependable.

Frugal Surfers:

Picky and knowledgeable about competitive offers, these consumers care for design aesthetics and seamless user experience (e.g. they demand a fast and easy online service that resolves their issues promptly).

They are looking for the best deals and show interest in credit cards, home insurance, commercial agricultural loans, investments and Stocks IPO.

Quite the meticulous planners, their concerns relate to the uncertainty of whether their chosen firm will survive in the future and their capability of processing claims effectively.

A very significant characteristic of this group is their risk averse behaviour. To avoid any future worries, they prevent these situations from the start, being driven by factors such as the annual rates, wonderful customer service, low monthly rate, transparency and openness.

For Frugal Surfers, fair policies are key, and one can enhance the number of consumers by leveraging their digital smooth solutions. Companies must take into consideration the possibility of offering low cost options, ensuring ease of sales, and unique promotions for clients to switch from other providers. Also, aligning with large pet brands/retailers and other financial aggregator portals can be very useful for the insurance company to attend their clients’ demands.

Dejected Movers:

They’re interested in cars, jewelry insurance and phones. Dejected Movers are all about attempting to profit from their purchases, but they are upset, after bad experiences with other companies. These negative situations lead them to look for a more transparent insurance brand.

These customers are upwardly mobile and keen to be associated with new successful companies. However, they are skeptical, and fear being deceived by a startup insurance company, experiencing poor service and dealing with lack of transparency.

To win their loyalty, which can be really challenging as they are distrusting and not easily convinced, businesses must make sure they come across as reliable and trustworthy.

How can brands create the perfect brand experience?

A stellar and consistent brand experience is needed in order to attract consumers of the 2020s.

First impressions count, but so do all the following impressions. As younger generations increasingly hold spending power and become the demographics most in need of insurance plans, these generations’ greater need for authenticity means that as consumers, they seek to get to know the brands they’re thinking of buying.

More and more people intend to spend time doing a digital ‘stalk’ of a brand’s social media, news, and opinions before considering purchase. Once signing up to use a certain brand’s service or product, negative experiences will be voiced out, whether that’s on reddit threads, or in direct callouts on twitter and instagram.

When it comes to financial planning services, to attract different customer segments, insurance brands have many phases to take into account:

  • Trust-building: Keeping in touch with customers through social media, eCRM formats like newsletters, webinars in order to maintain and grow visibility and develop trust

  • Availability in times of need: Showing support for whatever they request (displaying willingness to help on social media whenever there’s a complaint can shape the opinions of other users, and potential clients, checking the same platform)

  • Delightful Differentiation: Providing a unique, enjoyable customer experience that sets them apart from other companies in the market.

How can insurance companies create the perfect brand experience?

On-the-go Engagement

People expect fast and personalised service wherever and whenever they require it, and to target these customers, brands must offer the most reliable, stress-free experience across formats, catering to consumers’ fast-paced lifestyles. A big hassle in the insurance world of administrative matters is the sheer tediousness of the claims process - which most certainly (and understandably) inspires procrastination. As such, app-based communications are highly effective as they offer the convenience of accessing policies and claim procedures right from one’s mobile phones.

Making Insurance easy to understand

Consumers looking to buy insurance products often face the challenge of demystifying a great deal of jargon, and tend to come out feeling confused by lengthy documents and unfamiliar terms. Such linguistic inaccessibility can pose a significant barrier to successful closing of deals - consumers would feel less inclined to buy something they do not wholly understand, as it makes it hard to trust a product’s effectiveness if one doesn’t fully comprehend it.

Customers want to be able to easily understand their insurance products options and risk considerations. Brands can help them choose services communicating in more accessible language, launch thought leadership content that help to explain and educate potential and existing consumers on various concepts and terms, establishing themselves as an ally in helping consumers reach financial literacy and sound financial planning.

After sales: Pay attention to paperwork pains

A huge nightmare in insurance is the claims processing. Consumers are often disgruntled and lose patience with the experience, as all they hoped for was the process to be transparent and timely.

Brands can handle this customer need by communicating regular status updates on the payments processing, shortening wait time for claims to be paid, and for cases where claims processing might be tricky and slow, consider relationship management strategies to grow consumer loyalty and build trust.

To access our full report, get in touch with [email protected]