Plan V Care: A Case Study in Insurance Market Micro-Segmentation
Kate Lyons, Head of RGAX, UK
To create sustained growth, insurers and distributors are changing how they look at target markets. Solutions designed to appeal to a wide range of buyers still bring in revenue. Yet they often fail to reach the untapped pockets of opportunity – such as younger buyers, women, and first-time homeowners – that will drive revenues for decades to come.
Micro-segmentation, breaking markets down into increasingly smaller segments, is an approach we use to help carriers design tailored products and create compelling messages that convert potential buyers into customers.
Selling Insurance to Millennial-Aged Women
Commercial viability is always a concern when assessing target markets, but micro-segments need not be tiny. For example, millennial-aged women are the focus of one of our current micro-segmentation initiatives. Most insurers recognize millennials and women as relatively untapped opportunities for life insurance. When you combine the two segments and focus on the intersection – millennial-aged women – the opportunity is still significant. For reference, an estimated 8.5 million millennial-aged women live in the UK, and more than 36 million live in the US. Asia is home to one-quarter of the world’s 1.8 billion millennials, over 50% of whom are women.
In a recent article, I shared some findings from our research into this opportunity. Since millennial-aged women in different parts of the world have unique needs, we narrowed our focus to Spain and the UK. In this study, we discovered the key elements that will help us develop a targeted solution:
- Many millennial-aged women have more financial knowledge than they give themselves credit for, so the buying process must instill confidence.
- These women prioritize self-care, spending roughly 8% of their income on short-term investments, such as gym memberships. Messaging insurance as an essential component of a long-term self-care strategy may help.
- They understand that their value to their families is far more than financial, making it difficult for them to anchor on the amount of insurance they need. Insurers must help millennial-aged women accurately evaluate the hard costs of replacing their financial and non-financial contributions to the family.
- Millennial-aged women don’t think about their risk of heart disease and stroke, the traditional older-aged diseases. Instead, cancer is top of mind, as they have often seen, first-hand, the toll cancer takes on friends or family members.
Learn more about our research into the needs and attitudes of millennial-aged women by reading Why Don’t Millennial Women Engage with Life Insurance?
Paving the Way with Plan V Care
Our next step was to take these learnings and collaborate with partners on a solution designed to appeal to millennial-aged women that addressed their core concern: cancer. This experimental initiative, called Plan V Care, tests whether tailoring a proposition from end to end can improve conversion rates, decrease acquisition costs, and ultimately grow the market.
But before we began concept development, we had to be honest with ourselves. Despite the data, we gathered from the study, how well did we really understand our target market?
The Need for Diversity of Thought
We know from experience that diversity of thought is required to solve complex problems, and meeting women’s insurance needs is no exception. Our industry, and the broader healthcare industry, has a long history of providing products and services for women that were predominantly designed by men. That’s changing across the industry, and RGAX has strong female representation at all levels of the organization. Many of us on the team, myself included, are millennial-aged women.
Nevertheless, we wanted to ensure we understood this audience well enough to design a proposition that would resonate with them and lead to higher conversion rates. This aim led us to seek out partners who could bring additional knowledge and experience to the table.
Through our global network, we were introduced to Moody Month, a HealthTech company that Amy Thompson founded and leads. Moody Month is a health and wellness tracker designed for the audience we want to target. Amy’s team brings a deep understanding of the customer and has a proven track record of engaging with millennial women. While we bring the insurance expertise to the table, we collaborate with partners – in this case, Moody Month — to design assets and find the right tone of voice to engage the target audience.
Avoiding Costly Mistakes
I can’t overemphasize how important choosing the right partner is. Over the years, we’ve spoken to many businesses who have tried to innovate from within and failed. Looking outside your company and the industry for target market expertise adds a new dimension to diversity that can help you avoid costly mistakes.
Plan V Care is not the first time we’ve partnered outside the insurance industry. For example, our digital mortgages initiative focuses on selling life insurance to first-time home buyers. For that initiative to succeed, we tapped into the expertise of organizations with experience in the mortgage market that understood the psychological makeup of people buying their first home. As you consider which microsegments you want to target, you’ll want to establish relationships with people and organizations that have travelled that road before.
After connecting with the right partner and developing the Plan V Care concept, the next step was to build a plan to reach millennial women effectively.
Go Where the Customers Are
Where you market your proposition is incredibly important. In this digital age, buying behaviors are constantly changing, and distributors must go where the customers are, instead of waiting for the customers to come to them. Our instincts – and the fact that we have plenty of millennial-aged people in our organization – suggested social media. But then the question came up of ‘which platforms?’
Moody Month’s experience with our target market indicated that Instagram was an effective commercial channel for this segment. Similar to what newspapers, TV, and radio were to previous generations, social media is to millennial women. The social platform Instagram, specifically, is where they connect with friends and peers, engage with brands, and learn about the world. The consumer testing we conducted further validated this.
Partnering with Influencers to Reach Millennial Women
So, how can we best leverage this channel? Our plan is to test a strategy that many millennials are familiar with: using social media influencers to get the word out. Our roster of influencers includes a finance coach, a confidence coach, and a woman who battled cancer at the age of 31 and whose friends crowd-funded so that she could remain in her apartment. The team will track how these partnerships impacted conversions and costs and will uncover whether leveraging influencers in this way will enable the distributor to increase conversion rates.
Once Plan V Care launches, we’ll undoubtedly learn many things, but our proposed strategy will help answer two crucial questions about marketing to millennial women:
- Does segmentation have a meaningful impact on conversion rates?
- Is Instagram more/less effective at attracting customers, and does it positively impact acquisition costs?
Which Micro-Segment Will You Target?
Our work with Plan V Care is about more than tapping into the millennial-aged female market for insurance solutions. We aim to package the data and insights to develop a model that can be scaled with our clients and leveraged across other micro-segments as well. I named a few earlier, but there are plenty more. The only limit to the micro-segmentation approach is your imagination and your organization’s discipline to do the research and leverage the learnings.
If you have a target market in mind, reach out to us. RGAX can help you tap into current initiatives and connect with others who can bring outside-the-industry expertise to the table. To get started, reach out to me directly or to my colleague, Charlie Mathews.
- International Finance Corporation (IFC) 2015. She for Shield: Insure Her to Better Protect All.
- Banthia, Anjali, Susan Johnson, Michael J McCord and, Brandon Mathews (2009). “Microinsurance that works for women: Making Gender Sensitive microinsurance programs.” IL