Six Insurance Stories to Tell

0 January 23, 2015 at 3:57 pm by

For a brief time in my career, almost 20 years ago, I worked for an insurance agency. The agency was (and still is) quite successful. I learned a lot in that time, about selling, advice and how to lead a good customer call. (And the fact that I didn’t want to sell insurance as a career. 😉 )

The most striking (for me) observation I made when going to customer calls with my boss was how little he actually talked about insurance. Conversation was more about family, friends, sports, the latest neighborhood project or whatever – of every hour, maybe 5-10 minutes were spent talking about actual product. It took me a while to realize why that worked.

What is it you actually buy when you buy insurance? The wonkish answer is “the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment” (I stole that from Wikipedia). In commercial insurance, that is probably all the answer you need, but for retail, I would go with the layperson’s answer: “you buy peace of mind”.

But that was 20 years ago. We hear a lot of how the consumer is changing (also from me on insblogs) – will selling peace of mind be enough? What else can insurers sell?


Not my idea: it is from a fascinating book by Rolf Jensen, Dream Society thumbnailthe former director of the Copenhagen Institute for Futures Studies. Written in 1999, “Dream Society” explores what will come after the information society. When most people have everything they need – i.e. when the bottom two rows in the Maslow hierarchy of needs are met – and commodities can be produced by machines, how can companies differentiate? What will people buy? Jensen’s answer: they will buy stories.

The down side of writing about the future is that a few years later some wise guy will come along and pick apart what you wrote. Mr. Jensen wrote at a time where  the general outlook of the future was a lot more optimistic than it is today – 1999 was before 9/11 and all the burst bubbles since then. Still, a lot of the principles he writes about seem right, even today, and one of those is that of buying stories.

Some examples.

Mp3 players. Most people have one, and the technology necessary to fulfill the function adequately would cost just a few dollars. Yet people happily pay multiple times that because of the image of the products, of the companies that sell the products – because of the stories.[1]

Microbreweries, for beer or spirits, have become the “in” way to drink. Not because of the quality of product, or at least not exclusively because of quality, but because of the stories behind them.

Rolf Jensen describes six markets on which the consumer in the Dream Society will buy:

  • The market for adventure
  • The market for love and belonging
  • The care market
  • The who-am-I market
  • The market for peace of mind
  • The market for convictions

Insurance has traditionally sold peace of mind; my insurance agent told his customers “trust me (and my company) and I will take care of you in case something bad happens.” That is a good story. But if the future consumer is of the Dream Society and all you CAN sell are stories – should insurers be looking to tell more than just the one story?

And what stories can insurance tell?

We can take the market for peace of mind as a given for insurance – although most insurers don’t officially don’t sell it that way, some do, and good agents do anyway. But how about the other markets? Here some ideas:

If you have ever heard an actuary joke, that one would seem impossible.[2] On the other hand, the tobacco industry successfully used the adventure market story, so why not try? Adventure could be used either self-ironically (“It is an adventure to buy insurance”), as the safety-line metaphor (“Insurance is your rip cord”) or on its own (“Go with the flow. Buy OpenInsurance”) . Adventure and security seem counterintuitive, so adventure insurance should be an interesting brand indeed. The risk portfolio would also be an interesting one – maybe as insuring the otherwise uninsurable?

Love and belonging
This one should be easier. Insurance is in the business of risk sharing – just emphasize the sharing aspect, and you are squarely in the togetherness market. Some mutuals hint at this – why not make it the core of the brand? New business models like Friendsurance also take advantage of togetherness (in the form of friend networks), but don’t go so far as to sell the story. Yet. [3]

Remember the Tamagochi? Its main purpose (besides annoying parents) was to provide the feeling of care-giving. Can insurance do that? Sure, e.g. by linking every product you sell with a care-giving cause. Or make it about care-receiving, which can be in any form of personal insurance. How about becoming a mediator, forging a giver-receiver bond?

Who am I
This is easier to do with products. By using the xphone [4] we say “I am the ultimate techno-geek”, drinking brand Y vodka places me as the rugged charmer, and buying a Z blowtorch shows I am an great do-it-yourselfer. I can’t really see insurance products per se entering this market – but new combined business models could. If we think “people don’t want a car plus insurance, they want mobility”, and you repackage yourself to sell mobility, suddenly you could appeal to different types of who-am-I.

Jensen contends that the conviction market might be the most important one because the battle over wallet share can only be won by gaining enough consumer attention share. Selling to the conviction market should be fairly easy for insurers – whether it’s politics, social responsibility, ecology or whatever.

The downside of these markets should also be obvious now – you can’t be everything to everybody anymore. Convictions preclude each other, if you are rugged you can’t be mellow etc. But, all companies in the future will have to target better anyway. Stories are a good way to do it.

Have you settled on the story you want to tell? Last question is then how you know who and where your target customer sets are. Through advanced analytics, of course – a topic about which much has been written already (e.g. here). And a step even further towards personalizing the story for your clients could be cognitive computing. If you are interested learning more about this, there is an upcoming webinar for Canada with the title “Is cognitive computing a game-changer for Insurance? Ask Watson” on February 3rd. I am sure there will be some interesting stories…

[1] Some people will cite usability, but the difference there has become marginal.

[2] I’ll tell you one if you ask nicely.

[3] For the link you have to be able to read German, sorry about that. Any English language equivalent?

[4] Just in case you didn’t notice – the xphone is a spoof. Would be cool, though. (I am a geek.)

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