Marketing Strategies

How D2C is disrupting the insurance industry

The direct to consumer model is taking the insurance industry by storm. Direct to consumer (also known as D2C or DTC) is all about how companies are connecting with their targeted audiences. D2C brands are able to form a direct relationship with their customers, which makes it easier to gather intelligence, tailor products to their needs and sell directly to them.

It’s easy to see why the direct to consumer business model would be appealing to insurers.

  • Create customized products: Current customers constantly have life events that change their insurance needs – such as getting married, buying a house, having children, etc. Having a closer relationship to policy holders allows insurers to more easily cross and upsell products to meet these new needs.
  • Lower operating costs: The D2C model encourages insurers to cut down on the amount of third-party platforms they need to partner with, which cuts down on unnecessary costs.
  • Streamline the customer journey: Personalized chatbots can help consumers decide which products are right for them. Educating and removing roadblocks for consumers increases the likelihood of converting those consumers into customers.
  • Improve customer experience: The D2C model allows insurers to implement online underwriting to assess the risks and provide convenient online quotes. The claims process can also be digitized, providing a better digital experience for users.

Let’s take a glimpse into how real-world insurance companies are using D2C to get closer to their customers, mitigate costs, increase sales and improve customer loyalty.

1. ZhongAn cuts out the middle-man to build a closer relationship to consumers

Chinese P&C insurance company ZhongAn, started as a Alibaba, Tencent and the insurer Pen An in 2013. Initially, ZhongAn was selling micro-insurance policies on third-party partner platforms (e-commerce, transport, etc.). However, the company didn’t want to become dependent on their partners and wanted to build a closer relationship to their customers. In 2015, ZhongAn reduced the number of intermediary sales and decided to focus on D2C selling. The insurer invested in data and technology so that it could use artificial intelligence to automate 70% of its online customer service. In 2018 it launched its ZhongAn ANswer chatbot, which recommends insurance policies to new and existing customers with 94% accuracy.

ZhongAn credits this move with an increase in younger customers buying policies. The insurer reports that 56% of their policy holders are under 35, they have increased the amount of first-time insurance policy holders and have increased the policy renewals.1

2. Lemonade uses behavioral data to create personalized campaigns and increase conversions

Personalization is a big part of the D2C model. D2C insurance brand Lemonade uses behavioral data to personalize advertisements. On a broader scale, any D2C brand can use behavioral data to segment and target audiences based on their behaviors – collected through website browsing, email activity, and other marketing campaign engagement metrics – thereby improving performance and relevance for acquisition campaigns, retention efforts and loyalty programs.

If a consumer browses renters insurance options on a brand’s website, and then fills out a request for a quote, the insurer can deliver an email trigger campaign that offers additional content that can help nurture and convert the lead. The brand can also create a custom audience segment and serve up retargeting display banner ads to keep the brand top of mind and nudge consumers towards conversion, like the one Lemonade created below.

3. Cuvva turns auto insurance into a fully digital lifestyle product

Launched in 2015, Cuvva was the first auto-insurance that only existed as an app. Branded as a lifestyle product instead of an insurance product,2 this D2C company sought to fill a need in their customers’ lives as conveniently as possible. Cuvva is designed for the customer who is borrowing a car and wants to ensure they are covered while they are driving it. Signing up is as simple as downloading the Cuvva app, entering information on yourself and the car you want to drive, and selecting a quote. The process takes less than 10 minutes from start to finish. This digital insurance company is successful because it solves a need for its target audience and makes the policy-buying process as convenient as possible. Understanding the needs, wants and motivations of their target audience is crucial for a D2C company.

4. Dead Happy offers simplified, cost-effective life insurance for the next generation

One out of every four adults would rather go to the dentist than talk to their insurance company about end of life needs.3 Dead Happy wants to change that. The brand is aimed towards Gen Z and Millennials who want to plan for the end – and their tone of voice conveys that. Their tagline is, “Life’s too short to search for decent, cheap life insurance” and they’re not wrong. Dead Happy knows who their audience is and uses these insights to speak to target audiences in their language. They also provide services such as “pay as you go,” which is ideal for a younger customer who might not have a steady income as well as “death wish” end-of-life planning. Dead Happy uses their intimate knowledge of their customer to tailor their offerings and branding style in a way that up-ends consumers notions of how an insurance company looks and operates.

As D2C marketing grows more popular, insurers are putting a greater focus on the user experience and overall customer journey to improve customer loyalty and attract new policy holders. Even if you aren’t working at a company employing D2C tactics, now’s the time to get started thinking (and marketing) like a D2C company. Building a data-centric culture is the key to succeeding in this exciting space.

Ask us how we help P&C insurers go D2C.


Editor’s Note: This blog was originally published in September 2021 and has been updated for accuracy and comprehensiveness in August 2023.

Natasia Langfelder
Content Marketing Manager

As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.