Role of Marketing in Insurance

by Cheryl Munson; Updated September 26, 2017
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Marketing plays a vital role within the insurance industry. It is used to increase sales and sustain marketplace positions for major companies and by smaller companies to build and grow their businesses. The use of marketing can be as far-reaching as a national television campaign to grow and sustain a major insurance company, and as localized as a business cards and fliers used by a local insurance agent. Regardless of size, marketing tactics and strategies are developed by all in the industry to target consumers and prospects to cover their insurance needs for home, health, life and commercial coverage.

CRM Database Development

Insurance companies develop a database of current customers that identifies them by the type of insurance policy they hold, name, address, age, ZIP code and other information. Companies use this information, referred to as customer relationship management data, to gain an understanding what types of policies are leading in sales and to identify growth opportunities to expand and increase sales. The CRM data is distributed to sales and marketing team members to assist in their sales and marketing strategy efforts.

Competitive Analysis

Companies continually assess the marketing efforts of competitors. They conduct competitive analysis efforts to identify what other companies are doing in terms of pricing, product offerings, target consumers, advertising creative works and brand positioning. The information is segmented to compare services based on geography and types of consumers, such as homeowners, car owners, city or urban dwellers and online insurance purchasers. The results of competitive analysis are used to identify to assist in sales efforts to grow and build customers.

New Product Development

Marketing is used to identify opportunities to develop new insurance products and advertising positions. For example, an insurance company that provides homeowners insurance would study markets where the purchasing of condominiums is on the rise. The information would then be used to market insurance to owners, real estate agents and condominium property managers.

Crisis Marketing Management

Accidents caused by man or nature have an immediate and direct impact on insurance companies and their marketing efforts. For example, if a hurricane hits in Florida, insurance companies take a first responder marketing approach to authorize and place representatives on site to take care of claims by insured customers. This is done to satisfy customer service responsibilities as well as to thwart any potential for adverse or negative publicity about the insurance company and their responsiveness to the needs of insured customers after a disaster or crisis.

Leveraging Marketplace Opportunities

Insurance companies leverage opportunities to plan their marketing efforts. For example, an auto insurance provider looks at cities that have a high incidence of traffic accidents to identify business growth opportunities. The companies gather statistics on the amount of insured and non-insured drivers, and the results are then used to leverage opportunities to achieve additional new customers and corresponding costs to acquire them through executing advertising, incentives and promotions.

Major companies go as far as purchasing real estate and naming rights for venues to leverage their marketplace opportunities. For example, the Nationwide Arena is the anchor of the arena district in Columbus, Ohio, which is a major entertainment hub for sports, dining and hotels in the city, home of the corporate headquarters for Nationwide Insurance Co.

About the Author

Cheryl Munson has been writing since 1990, with experience as a writer and creative director in the advertising industry. She holds a Bachelor of Arts in journalism with a focus on advertising from the University of Wisconsin in Madison.

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