Life after Lockdown: Insurance Premiums Under Pressure?

Apathy has long been the friend of the insurance industry with many consumers simply renewing their policies each year without question. This is all about to change.

As we emerge from the inescapable effects of the lockdown, financial belts will be tightened around the country. The massive contraction in several major market sectors has left millions unemployed, struggling to make ends meet on a dramatically reduced income. In every community, pockets of previously comfortable dual-income families will be feeling an extremely strong pinch. 

Despite the Chancellor’s best efforts to soften the blow, households across the UK are looking for ways to make their new, lower fixed income work harder.

Their first line of attack will be to reduce or completely scrap unnecessary luxuries such as dining out, gym membership, visits to the cinema, theatre and beauty salon.

Consumers will also be scrutinising their regular, unavoidable, outgoings such as utilities. Near the top of the list will be insurance. 

The importance of insurance in life after lockdown

Described by many as a necessary evil, insurance provides a degree of certainty in uncertain times … and a long period of uncertainty is inevitable post-Covid-19. Buyers will want broadly the same cover but at the lowest possible price, whether it’s for their motor insurance, household insurance or bicycle insurance.

Many consumers have been lulled by persuasive TV advertising campaigns into thinking that comparison websites actually offer the best deals. With pennies to count and time on their hands, they are likely to start shopping around for themselves to find cheaper premiums.

And where are they going to be looking? On-line, of course.

Digital marketing for insurance companies

If you run an insurance company or are an insurance broker, there’s never been a more important time to ensure your marketing house is in order.

  • Is your current marketing activity fit for purpose and geared up to attract the torrent of new customers that will inevitably flow looking for a better, cheaper and more personalised experience?
  • Is your website optimised? Can it handle click and buy transactions like this website we created for Hiscox? Is it geared up to remind people when their premiums are due?
  • Are your staff sufficiently well trained and empowered to deal with telephone enquiries?
  • Have you empowered them to reduce premiums (within limits, naturally) rather than lose a new contract or renewal opportunity?
  • Are your social media accounts populated with interesting, entertaining and useful content?
  • Have you reviewed your digital advertising recently to ensure it’s still performing to the max?

And lastly, have you considered creating stand-alone brands for specific products? This is a sure-fire way of ‘cornering’ a niche market and building up a solid book of customers with the potential for recurring fees for years to come. Here’s just one example of a brand we created from scratch.

Embracing insurance customer loyalty

And don’t forget the importance of looking after your existing customers. They will inevitably start shopping around for better deals.  

When insurance giant Admiral recently took the initiative to partially refund its motor insurance customers because of the reduced number of claims due to lockdown, they banked a huge amount of customer loyalty. Consumers remember and value such gestures.

The economic instability brought about by Covid-19 will mean that the cost of insurance premiums will be challenged for some time to come. While this might fill some with dread, others view this as a great opportunity to snatch business away from competitors.