Service sector activities, intangible as they are, demand a marketing approach that stands apart from that of other sectors which have physical, tangible products to sell and promote. When we mention services — which includes insurance — knowing and understanding the many facets of marketing in this area is key to your success.

The insurance sector

The insurance sector is complex, dynamic, and plays a fundamental role as a pillar of the economy. Insurers take on risk for unexpected events, such as accidents, illness, or natural disasters, and disburse compensation to customers who go through such events.

The insurance sector's value chain comprises three main components:

• Insurers — the companies that take on risk and pay out claims.
• Distribution — includes insurance brokers and other insurance intermediaries whose mission is to understand customers’ needs and put forward insurance solutions that address the risk these customers face.
• Customers — companies or private citizens who decide to transfer a given risk to an insurer.

The challenge of intangibility

The main challenge facing the insurance sector, marketing-wise, is the intangibility of its products. Insurance is a promise of protection and peace of mind held up by a contract under which, if an adverse event occurs, the insurer must restore the insured’s property or pay out indemnity to the insured so that they can go back to their lives or businesses as they were before the claim arose.

So, you don’t have a physical product where you can demonstrate attributes and features or develop a packaging style to highlight them. The entire marketing strategy needs to rely on the promise that the company will do their part on the moment of truth, which is to say, when the customer faces an adverse event giving rise to a claim.

The importance of branding

Branding is a fundamental component in insurance marketing. A strong, reliable brand can help a company stand out among competitors and win customers’ preference.

Trust is one of the most meaningful pillars of a brand — customers need to feel secure when they buy an intangible product. As Kotler says, trust is the most valuable currency in marketing.

To build a strong brand, companies need to define their positioning with clarity, invest on communication that is consistent with such positioning — and, as is the case of MDS, we have taken on the additional mandate of advancing literacy on insurance topics.

From product to service

Marketing plays a vital role in the development of new products and services. Based on market and consumer surveys, one can identify opportunities in the market, possibilities for innovation, and develop products that will address customers’ emergent needs.

In cooperation with other domains, namely the technical and technological, marketing should be able to develop attractive, comprehensive, but also customizable products.

As to distribution, whether we’re talking broking or mediation, the service rendered is advice and market search for solutions that respond to customers’ risks and advocate for customers with insurers.

To follow a service marketing approach is to understand customers’ needs and provide tailored solutions that will add value. As Harry Beckwith states in Selling the Invisible, customer experience is as important as the product itself.

In that light, we must create experiences throughout every step of our interaction with the customer, from quote to purchase, ensuring support when claims arise as well. Distribution ought to focus on building lasting relationships with customers, not merely processing transactions.

The importance of data to building a unique customer experience

Data represents vast potential in support of analytic activities that will lead to deeper understanding of customers’ needs, expectations and preferences.

That kind of work allows companies to customize their product offerings, develop more effective communication strategies, and create experiences that address the individual needs of each customer.

The meaning of a personal touch

Customers need to feel that the insurance products and services they buy meet their specific needs. Companies must, therefore, add a personal dimension to their offerings to guarantee that they respond to customers’ expectations.

That can be achieved in a number of ways, such as:

• Market segmentation: per criteria like age, gender, location, lifestyle, or specific needs.
• Customized products and services: offer solutions adapted to customers’ specific needs, according to your knowledge about your customer.
• Communication: companies must add a personal touch to their communication strategies to reach the right customers with the right message.

In this light, data analytics comes up as a crucial tool, as it affords deep insight into customers’ expectations and preferences. Such insight allows for a range of product and service offerings that is more in line with individual needs and more amenable to designing tailored experiences, which could prove crucial to customer loyalty.

So, in the challenging universe of insurance marketing, adaptation is the word of the day. Because we deal with product intangibility, building trust and a distinctive presence through solid branding becomes fundamental.

Future trends in insurance marketing point to growing use of digital marketing, customized solutions, the use of data, and artificial intelligence. Such trends will bring companies in the insurance sector new opportunities to connect with their customers and promote their products and services.