Seeking to extend the brand into the online channel

American Family Insurance is a large private mutual company focused on property, casual and auto insurance. The company goes to market primarily through a “footprint” of licensed agents who work out of traditional brick and mortar offices. The company is proud of the personal touch delivered by its agents, and it considers its agent network to be integral to its success and a competitive differentiator.

However, with the emergence of highly successful online insurance propositions (e.g., Esurance) in recent years, American Family Insurance realized it needed to reevaluate its position regarding a direct-to-consumer offering. The company believed this path to market provided a way to increase relevance among a set of (predominantly younger) consumers who prefer to do business online. It also saw it as a way to significantly increase its geographic footprint, since it has licensed agents physically located in only 31 of the 50 U.S. states. The company hired FullSurge to develop a value proposition for the direct-to-consumer offer. In doing so, it was important for us to not devalue the company’s core/base offering, nor alienate its loyal agent base.

Redefining the meaning and role of an “agent”

FullSurge conducted in-depth market research to understand how consumers define and value the role of the agent in the insurance industry. What we found contradicted what the client believed about the role and importance of an “agent.” Consistent with our client’s past research, our findings indicated that having an agent is indeed important to the purchase decision. However, we also discovered that the aspects consumers value most about agents are the more perfunctory and transactional services they provide. Specifically, nearly 80 percent of consumers said that having an agent was important, but only 24 percent said they valued having a strong, personal relationship with their agent. (See below) In other words, they merely want to make sure there will be someone available who can answer questions and handle basic inquiries. And importantly, it doesn’t even have to be the same person every time, nor take place in a physical brick-and-mortar office.

This seemingly subtle difference carried with it significant implications. First, it helped the client understand there was less risk than initially believed in taking their offering into the online channel. Second, it prevented them from over-delivering on the online offering by providing costly customer support services that consumers would not value. Finally, it was instrumental in developing a unique and compelling value proposition.

Specifically, nearly 80 percent of consumers said that having an agent was important, but only 24 percent said they valued having a strong, personal relationship with their agent.

A successful pilot launch

American Family Insurance embraced our recommendation for a direct-to-consumer value proposition—one that emphasized the speed and ease of the transaction as the primary benefit, while also reassuring consumers about the basic level of service and support they seek. Several months following our recommendations, the company proceeded to launch a pilot of the new offer in select markets (ones outside its geographic footprint) to test its appeal, fine-tune aspects of the offer, and validate the recommended value proposition.

Partnering with FullSurge brought critical brand strategy and growth expertise to round out our internal team. The work was well regarded across the organization and helped us expand our thinking beyond our industry, thanks to the FullSurge team’s rich experience.

— Anne Norman
Director of Enterprise Brand Strategy

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