In an increasingly busy industry, insurers are struggling to stand out from each other. Client X was seeking to gain market share through the use of incentives, so we worked with them to develop a strategy that would drive acquisition in an effective manner. Client X is a large general insurance provider that has a very strong history but as a result of rationalisation of their insurance book, was looking to aggressively grow market share.
The general insurance market has become overcrowded with disproportional influence exerted by comparison sites and aggregators. Insurers are also increasingly limited by regulatory requirements that push them to encourage customers to regularly look elsewhere for a better deal.
Xexec was left to build a model that would look at the key elements to actively grow market share whilst at the same time ensuring that the acquisition would be targeted and valuable over an extended customer lifespan.
Xexec developed a model that was broadly based on a percentage of annual premium that would be used as an acquisition incentive. As Client X sought to aggressively and quickly grow acquisitions, it dedicated a sizeable percentage to the incentive, knowing also that they enjoyed very strong retention rates through their existing engagement and hence their lifetime customer value would be significant.
Rather than offering a proscribed incentive, Xexec developed an aspirational selection around the different incentive levels, allowing the customer to select their own incentive. These ranged from an M&S or Amazon voucher through to Theatre Tickets, Spa Breaks, Afternoon Tea and even Bungee Jumping and Recording Studio sessions. The diverse selection empowered the customer to choose what they really wanted whilst at the same time supporting a robust breakage model.
Xexec worked with Client X to identify potential audiences based on postcode suitability and other data driven segmentation tools. Xexec recognised the need to encourage customers to take out a quote, notwithstanding that they maybe a number of months away from renewal. As such, the incentive was an encouragement to get customers to input their renewal dates into a very simple online form. Customers completing the form were instantly sent a voucher for a free cup of coffee usable until their renewal date. Customers were contacted 3 months prior to their renewals to notify them that an excellent offer would be sent to then again one month before renewal, alerting them to look out for it.
The results have been very significant. Quote incentives increased capture of renewal dates by over 40% with the conversion rates to purchase of those who had provided their details as a result of the quote incentive almost 30% higher than those who had not. The most significant success was the acquisition incentives which as a result of their flexibility undoubtedly drove customers past the line. Conversion rates on new policies increased by more than 40% which coupled with the very low attrition rates enjoyed by the Client has delivered an outstanding ROI. Additionally, the cost of the incentive when amortised over the lifetime of the customer together with the benefit of breakage meant that Client X enjoyed a very significant return as well as further increasing their NPS as a result of the quirky and exciting incentives.