GEICO Reinvents Insurance Marketing Again with Latest Move to Slash Direct Mail
After consistently coming in as the top P&C direct mailer, GEICO is now out of the top volume players altogether. The insurer’s mail volume took a nosedive in May 2021 across all its products, suggesting the channel may no longer be a major component of its overall marketing strategy.
Where is that money going? Comperemedia has two theories:
TV, OTT, and Video
After reinventing insurance marketing through big-budget television campaigns, GEICO may now view video as a stronger indicator of brand awareness or response metrics. The insurer has not yet made significant changes to other channels, but its hefty investments in national TV and online video will likely stay strong, if not increase with the entry of new streaming and OTT services.
According to JD Power’s 2021 Insurance Shopping Study, “The top five insurers—in terms of total premiums—now account for 60% of all auto insurance premiums, up from 44% two decades ago,” making it even more essential for GEICO to produce the lowest rates. Recent Mintel research on the P&C industry revealed that insurance buyers are very price sensitive and Millennials are most frequently switching their auto and home carriers compared to other generations, meaning GEICO’s decision to cut direct mail could be a response to this shopping behavior.
When should you watch for other changes?
Keep an eye on Q4. GEICO’s marketing strategy largely follows a seasonal trend, with peak spend occurring in the Fall to coincide with sports seasons and television premieres.
What does this mean for the rest of the industry?
With GEICO out of the picture, P&C insurers have a unique opportunity to stand out in direct mail. Progressive and GEICO often go head to head across marketing channels in terms of total spend, direct mail included. With one powerhouse gone, insurers should use direct mail to their advantage. Knowing Millennials are shopping at a higher rate than other generations, insurers should ramp up messaging that caters to this cohort, especially when they have fewer offers in their mailboxes. This could include highlighting how insurers have innovated their business through digital customer service, personalized policies, and commitment-free pricing.