Insurance industry can benefit from loyalty marketing says Aite
Published: January 27, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
Insurance companies will soon be able to use loyalty marketing techniques to engage customers, suggests a new Aite Group impact note. In the note, the company says marketing conditions are changing and insurers will soon adopt programs such as rewards schemes.
This type of marketing has typically been used in sectors such as travel, retail, and finance (credit cards). However, insurance is slowly moving into the space and is already incentivizing coverage with various benefits and discounts.
“The insurance industry is increasingly leveraging loyalty marketing techniques, such as rewards programs, to nudge customers toward preferred behaviours,” the Boston-based global research and advisory firm noted Friday in releasing Loyalty Marketing in Insurance: The Nudge Game.
In the 34-page report, the firm discusses 10 forces that are changing the market and suggest loyalty marketing and rewards programs in P&C, life, and health insurance have potential. The report contains 17 figures and two tables to illustrate the possibilities.
Aite Group bases the results on a series of 2016 interviews and discussions with more than a dozen insurance companies and technology vendors. Also included was 2016 interview and discussion evidence with the same companies on telematics and the Internet of Things (IoT). The company also conducted a number of online micro-surveys of adults in the United States and United Kingdom.
The evidence shows that insurance companies are starting to see the potential of loyalty marketing, even if the majority have still not implemented rewards programs or other techniques. Equally, regulators have typically frowned upon such programs in the insurance sector, but there is a cooling that has been driven by telematics.
“Telematics and IoT are now opening up considerable opportunities for p&c, life, and health insurers to become loyalty marketing powerhouses in ways that meet regulators’ concerns,” contends Aite research director Gwenn Bézard.
“Successful loyalty marketing won’t be as simple as copying a competing model, which will force insures to hone their processes and techniques,” Aite adds, pointing out that successfully implementing the techniques will take time.