Insurers leverage pandemic to promote the benefits of telematics

November 11th, 2020 | Lizzie Egan

COVID-19 forced many consumers to consider cost-cutting measures. Insurers used the opportunity to promote the benefits of usage-based insurance.

COVID-19 exposed the need for additional savings

Drivers have largely remained uninterested in telematics, but COVID-19 pushed many to find new ways to unlock additional savings, which heightened attention to usage-based insurance (UBI). Insurers ramped up ads for telematics in the summer to show customers their untapped savings potential. Offers varied by insurer, but all emphasized that UBI was a route to reduce premiums. 

Source: Comperemedia Omni
Source: Comperemedia Omni

Popular spokespeople made appearances to drive home the benefits of telematics. Allstate pulled out all the stops to promote Drivewise, with campaigns featuring Dennis Haysbert, Mayhem and Tina Fey, as well as general branding ads that all touted savings of 40%. Nationwide brought viewers to “Peytonville,” where Peyton Manning introduced Brad Paisley, and viewers, to the SmartRide and SmartMiles programs. 

Source: Comperemedia Omni

Personalization comes at a price

People are growing increasingly interested in exchanging personal data for tailored products or savings, but privacy is a glaring concern. Insurers reframed the privacy conversation by focusing on personalization and fairness, with special emphasis on customers’ control of the experience. By singling out “good” and “safe” drivers, marketers demonstrated that insurance is more personalized than consumers may think. Insurers’ taglines for telematics programs were consistent in that good drivers are different than the rest and should be rewarded.

Source: Comperemedia Omni

New reward options offer instant gratification

Rather than having people wait to see the discount they earned, road tests are giving them the answer upfront. If consumers remain unconvinced about UBI, a no-obligation test could close some gaps. Advertisers promise lofty savings, but users could end up frustrated once they finally receive their driving results months after signing up. By seeing their potential up-front, customers’ expectations are leveled and they also have a goal to work towards, taking some heat off the insurer. 

Source: Comperemedia Omni

Discounts are enticing, but the satisfaction might wear off quickly, especially if customers are enrolled in autopay. As a result, some insurers introduced new ways for users to redeem their savings. Allstate again put users in control to remind them of their good work with redemption options including a check, policy credit, on its rewards site, or even donating it to a good cause

Source: Comperemedia Omni

What’s next? 

Telematics is having a moment, but insurers need to stay persistent. They are in the right place, at the right time, and marketing drives home the chief benefit of telematics: savings. But with a crowded field of players, the message is getting muddled, and eventual economic recovery could result in many customers finding UBI to be no longer worth the benefits.

Insurers must be creative to attract users attention and maintain it. Here’s what we recommend:

  • Offer flexible redemption options beyond premium relief and keep earnings top of mind for customers.
  • Emphasize that customers are in control of driving down their auto rates with UBI, but be wary of contributing to an “us vs. them” mentality; frame messaging solely on users’ behavior to keep marketing light and less divisive.
  • Stay transparent (and ethical) about how data is being used and reiterate that data is above all used for the customer’s benefit.
  • With the help of automakers, introduce existing users to OEM integrations to showcase an evolving customer experience.

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Lizzie Egan

Lizzie Egan

Lizzie Egan is the Manager of Insurance Content at Comperemedia, where she pairs her cross-sector industry knowledge with competitive marketing analysis, consumer research, and consumer trends to build timely, meaningful stories with actionable insights for Mintel's clients.