When it comes to attracting customers, insurance companies get creative.
Remember when insurance companies gave away free coffee mugs and pens emblazoned with company logos? It was a way to thank customers, create brand visibility and attract new clients. The promotional practice still exists, of course, but insurance companies today tout their companies with more creativity and fanfare than ever. Anything to avoid losing market share.
Explains Cheryl Nishita, marketing and planning manager for AIG Hawaii Insurance Co.: “Promotions don’t make as much impact as when we were first in the industry. Customer acquisition is harder, much more competitive now.” AIG is a 14-year-old company with more than 300 employees.
Insurance marketers, such as Nishita, constantly toy with new gimmicks. Last December, AIG Hawaii gave away miniature, plastic cars to people who phoned customer-service agents for insurance quotes. The toy cars – exchanged with certificates sent to the customer’s address—were available at all Chevron gas stations for about three weeks last year.
For AIG, successful marketing means nurturing relationships with other local businesses. “We try to work out marketing strategies with our partners, so that we can develop products for both of us,” Nishita says. Last October, AIG teamed up with existing partner Hawaiian Airlines to launch AutoMiles, a program that gives 500 frequent-flyer miles to new customers who sign up for AIG Hawaii’s Electronic Funds Transfer plan. AIG Hawaii AutoBucks is another promotion in conjuction with Hawaiian Airlines. For every 5,000 frequent-flyer miles, customers receive a $25 AutoBucks certificate that can be used toward an AIG auto-insurance payment. The certificates are unlimited. AIG’s creativity comes at a time when Hawaii’s insurance companies are fiercely competitive. Direct-mail campaigns and free airline miles are only a small part of the changing formula.
The competition wasn’t always so cutthroat, however, say industry veterans. “We didn’t start seeing that change until the late 1990s, where you started to see companies advertising and aggressively going after customers,” says Linda Gilchrist, president and chief operating officer for Island Insurance Co. for the past three years. She has worked for the insurance industry since the 1970s. “In the past, people had a hard time buying insurance, and a lot of times, in order to make an appointment with somebody to get a quote, customers would have to wait days or even weeks. I think in the current state, where you have companies that are very competitive, it’s really ideal for the consumer.”
Island Insurance, established in 1939, is the state’s only locally owned and managed casualty- and property-insurance company. It employs more than 200. There are four in the marketing department.
The company’s promotional ploys follow a philosophy that is different from competitors. Rather than focusing on creative, trendy initiatives, Island Insurance reaches customers through 35 general agencies that provide over 1,000 independent agents. These are qualified professionals who personally know and work with each customer. It’s simple, and it works. “We don’t feel that most people can make decisions through the Internet or through the mail,” Gilchrist says. “Insurance is a complicated product, and we think it takes somebody to understand coverage and also understand the risk needs of the individuals.”
Independent agents aside, the company places great emphasis on its claims department. “We feel that is really where we get tested and where we prove to people that they made the right decision, that they bought the right policy,”
she says. Of course, Island Insurance boasts its share of traditional advertising and marketing methods. To this day, it still receives positive feedback for a snazzy television commercial featuring its own employee, Gary Iwamasa, a claims service representative.
The dog-eat-dog environment will continue, say industry leaders. “It has to be competitive, as long as you have multiple players in the industry,” Gilchrist says. “What will happen is, as long as businesses are able to make a reasonable rate of return – it doesn’t have to be super high – everyone, including consumers should be happy.”