Fit Life Covered A case study in Digital Life Insurance Distribution Todd Seabaugh VP Business Initiatives, RGAx September 26, 2017
WHO IS RGAx is a wholly owned subsidiary of Reinsurance Group of America Entrepreneurs Execution Managers Actuaries One of our mandates is to find innovative means to Prime the Pump of life insurance sales to the middle market. 2
Original Problem Statement THERE ARE 1.2MM ACTIVE CROSSFIT ATHLETES IN THE US, OF WHICH, 28% HAVE NO LIFE COVERAGE, AND 58% BELIEVE THAT THEY NEED ADDITIONAL PROTECTION. March 2016 3
Why we believe they are not seeking protection? No one is marketing to them based upon their active lifestyle Could it be because of their likely preferred pricing placement? There are few digital sales efforts bringing life solutions to this market Health IQ The value proposition of fully underwritten term life insurance has not been well communicated Your premiums could be 50% lower than the standard non-smoker 4
Can we succeed with Affinity-based marketing? 5
Why CrossFit Athletes? We surveyed 1000 athletes in 11 gyms from across the US. Our Survey Findings: 89% college educated Analytical, Type A, Driven to Succeed, Many 1099 50% have income of $50K-125K / 35% see income of $125K+ Believe staying physically active provides an edge in life Believe products and services do not recognize their fitness/wellness Believe they would buy life insurance with preferred pricing Treat the gym like its own kind of church Do things outside of the gym together Provide care for one another when sick or suffer a financial or personal loss Recommend products and services to one another that they find useful (Fat Tanks, Chiropractors, Financial Advisors, Attorneys, Lifting shoe brands, etc., etc., etc.) Our message: Work Hard. Be Rewarded. 6
What we believed about this group Hypothesis: We can sell protection by employing strategic content that satisfies: Need for protection (Peace of Mind) Need to compare (Competitive Personality) Need for data (Analytical Personality) Need for someone to recognize my fitness work (Ego) Survey of 1000 athletes further reinforced the following: Want rewards for their commitment to a fit lifestyle, Want preferred pricing, Want to compare themselves to others, Want a digital application process Understand that it takes effort to qualify for preferred pricing and are willing to make that effort 7
So we built our site MVP Site: mylifecovered.com Fitness and Life insurance content mix One term product with a single carrier Online quoting engine with a detailed needs analysis Standard Non-Smoker and Preferred Plus Pricing in a single quote result One option: Apply Online 8
Marketing the site We promoted the site with Google AdWords spend and SEO Google AdWords for life insurance were very expensive to acquire! $18-40/click depending upon the phrase Inexpensive Life Insurance Term Life Insurance We tried using long tale AdWords but no one was searching for what we were bidding for: Life insurance quotes for the fit Life insurance for healthy and active adults Life insurance for fit and healthy adults Etc. Our sales were unimpressive, but our advertising spend was significant Carrier A Carrier B Carrier C Carrier D 9
Major Pivot 1 No meaningful success. We believed the name was not direct enough: Rebranded the site as fitlifecovered.com We believed the lengthy needs analysis we presented was too hard and time consuming: Simplified our quote request Full Needs Analysis I know how much I make (we multiplied times 10 for coverage) I know how much I need I know how much I can afford We believed people wanted to compare: Created 6 additional carrier relationships and offered quotes on 5 carrier products with each quote request We believed people might prefer to talk with an advisor (though they said online was preferred): Created options to apply online or by phone with a tele-agent 10
Pivot 1 Results We created about the same number of impressions So the cost per impression remained relatively constant Cost per lead decreased by almost 50% Cost per application decreased by a similar 50% Cost per lead was still 80x our target cost Surprise: Many of our leads, particularly those wanting to apply online, were NOT in our target at all Drug use Medical Conditions Turned down by other carriers Etc. 11
Intended Audience Actual Applicants 12
Major Pivot 2 CrossFitters were still not buying. - - - 1.4MM Americans CrossFit, but 54MM Americans belong to some health club or studios, maybe we should broaden the audience appeal. We redesigned the site: Gone with Work Hard. Be Rewarded. In with Training is all about you. Life insurance is all about them. We broadened our exposure More articles on health More articles on nutrition More articles on general fitness & nutrition We changed our ad spend We dropped Google AdWords, (remember, it was bringing us unqualified applicants) We added Facebook Direct Advertising to actives between 25-45, interested in HIIT, running and cycling We added Taboola-style advertising in web sites known to be visited by actives 13
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Pivot 2 Results We were now giving quotes to the right people Cost per impression went down significantly (< $2.00/1000 impressions) Cost per lead decreased by 40 times Cost per lead was still 2x our target cost however, but no longer 80x! Applicants were now in our target market Completed Application volume however remained disappointingly low (1 for every 98 leads) 16
Awareness Consideration Research Transaction (Quote) Too Difficult Too Many Questions Too Many Things I don t know Too Long! Too Many added requirements Too Much Time to rethink decision or lose interest Lost interest Higher than Preferred Plus Too difficult to complete Funnel Process Facebook Videos Taboola Ads Social Media Content Consumption Life/Nutrition/Fitness/Health Google AdWords Get a Quote Application Underwriting Offer Customer 97% Drop Off We have an emotional product and a situation where emotion can come and go long before conversion 17
Active/Healthy & Looking for Life Ins Through Web Marketing, finding a digital Life Insurance Audience, within affinities, is really difficult Google AdWords Easy to find the eyes Looking for Life Insurance Social Media Ads Easy to find the eyes Of Active, Healthy Adults in a specific Age range Neither platform gives you Active, Healthy & Interested in Life Insurance purchase. You need additional data to find the intersection. 18
Our Key Learnings With innovation, the big idea is just the beginning You will find numerous smaller ideas and hypothesis to test You will need to be nimble, and open to directional changes, to avoid unnecessary spend Success likely comes incrementally, as individual tests reveal conversion improvements and failings Developing a dedicated team to support the big idea is paramount. Shared duty resources aren t able to find the focus or passion to drive you to success 19
Our Key Learnings Life Insurance being largely sold, not bought, makes for a difficult online conversion It is difficult to build Trust online, and Trust is central to Life sales Agent assisted sales (for us) yielded better results Removing friction is key Because of this, fully UW product sales remain difficult to complete digitally 20
Our Key Learnings Finding Life Insurance interest, at the affinity group level, is still hard Google is working on services allowing you to cross-segment your advertising (right now, they are AdWords one-dimensional ) Finally, Evaluate innovation managers based on whether they executed disciplined experiments, not on ROI. Pro formas are great for telling you how much you will spend (or budget to spend) Pro formas are rarely spot on when it comes to revenue assumptions Holding innovation managers to Pro forma revenue projections as their primary success measure is very unrealistic Evaluate innovation managers based on running disciplined experiments Efficient spend Timely analysis Quick recognition of failures and successes 21
Thank you 22
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