Apple News Reveals Group Benefits’ Marketing Flaw

Group Insurance Carriers: How far away do you think Apple is from breaking into your market? 

Apple: They know how often you exercise, how well you sleep, where you go and, now, your financials. Many carriers would foam at the mouth to get this kind of personalized detail on their insureds. They certainly try. Health Risk Assessments and credit checks provide clues, but nothing like what Apple has been able to amass on its customer base.

Last week, Apple gave a masterclass in marketing to the entire Life Insurance industry. It’s clear that Apple’s products and Group Carrier products are not Apple® to apple, but that takes nothing away from what carriers can learn from their marketing approach, product (and industry) expansion strategy, and their commitment to innovation. 

I shared previously that Universal Life policies have been dying on the vine for decades, and in some situations, for good reason. The first policies were introduced in 1979 at a time when interest rates were in the high single to low double digits. When interest rates dropped beginning in the 80’s, older individuals lost significant value at a fairly unfortunate period in their life. 

Millennial and Gen Z consumers, however, have no recollection of such interest rates in their adult lifetimes. Since these two generations make up over 50% of iPhone users, you can imagine why Apple’s savings account product announcement generated so much buzz.

I spent some time researching Apple’s marketing philosophy and identified six distinct marketing elements that give Apple its edge. Separately, I listed an indicator to denote the market's perception of these same elements relative to group insurance carriers:

So how can group benefits carriers be more like Apple?

Get Serious About Innovation

In an industry built on risk aversion, business-as-usual is believed to be the prudent move, but I’m here to tell you that is bullsh*t. Take a look at how BAU has grown your market share or progressed your product expansion strategy to date. 

Innovation requires investment, human capital, willingness to fail and, most of all, executive and organizational mindset. It cannot be siloed from the organization, whether to be secretive or to only exist as pet projects. Innovation has to be embraced by all as a pillar of the organization’s mission. This is where group carriers have the most to make up for. For all the time many have been practicing BAU, unforeseen competitors like Apple have strategically positioned themselves for takeover. 

Reimagine the Customer Experience

Too many products at once, an hour of dedicated time to think about healthcare, death, disability, accidents (yours and your kids’), and then select your bets. To the end user, this is the reality of benefit education and enrollment, and the reality of their interaction / awareness of their insurance carrier with two prime exceptions: medical underwriting and claims. What about all of that space in between? What about the opportunity to interact regularly with your insureds via, say, their phone? You’re insuring their lives, yet you're noticeably absent from most of it.

Land and Expand

This is where I get most excited when thinking through Apple’s strategy and how it can apply to group insurance (and the specific example of Universal Life products). Apple’s savings account has seamless, integrated #underwriting in that applicants must be qualified Apple Card users. This target market had already proved their brand loyalty, creditworthiness, and ability to pay bills timely. Further, Apple let one product (Card) take on the customer acquisition cost for a second product (Savings). Two birds, one stone.

Market with Clear Language in Modern Mediums

Why are we still packaging up marketing materials in folders, mail kits, and embedded .pdf files on a company’s ben admin platform - or worse, their intranet? Carriers are still working on text capabilities for crying out loud! This point was made clear in LIMRA’s 2023 Life Insurance Barometer Study released just days ago: “...the industry must exploit the new digital world of consumerism and communication with methods that begin to convey the affordability…”- and I would add value - "... of many types of policies." Why can’t carriers engage with their customers the same ways their customers engage with everyone else? Maybe it’s because of tech, maybe it’s regulation, but whatever it is, carriers need to spend time getting in front of it. Start at the end: identify where customers will most likely engage with your message (spoiler alert: it’s not at work), then develop your marketing message to align. Your message and brand should be seen while they’re shopping (on their phone), working out (with their phone), ordering dinner (through their phone).

And as for the clear language, I don’t know, you tell me which suggests more value:

A savings account with a variable 4.15% APY

-or-

A flexible life policy and savings vehicle with a guaranteed 4% APY?