Why auto insurers should leverage driver behavior monitoring for advertising

To find the right audience for an advertising campaign, auto insurance companies typically leverage proxy data. Proxy data has served the industry well for decades, and the methods to improve that data have evolved and become more refined as well.

Today, there’s an additional layer of data that insurers can layer on to the traditional, time-tested methods to refine their audience selection even further: mobility data.

Mobility data, that is, contextually enriched telematics and location data, can help insurance companies optimize the dollars they’re spending in digital advertising by improving advertising campaign performance in two primary ways:

1. Supercharge the funnel: By leveraging mobility data, you’ll connect with the right people for your business goals sooner, which improves close rates.
2. Increase lifetime value (LTV) of your base: Driving behavior monitoring creates data that informs customer lifetime value when used to target advertising.

Let’s take a closer look at these two benefits.

Supercharge the funnel

Insurance advertising is competitive and is typically only paid attention to when the consumer is under duress; they just experienced a premium hike or have bought a new car. When it comes to advertising to drivers, it’s important to match the right offer with the right driver at the right time to not only to get their attention but also to make the marketing investment payout.

With traditional advertising methods, this is difficult. That’s because many auto insurers are using only simple proxy data to find prospects, and there’s no way to know for sure whether these specific consumers are a good fit for the business or whether they’ll remain a profitable customer over time.

With proxy data as the only tool, you may be missing a lot of great prospects or spending too little on the best ones, while you’re spending too much to acquire people you can’t profitably underwrite.

The good news is, mobility data that includes driving behaviors helps you to close more new business because you can provide a better offer for the right prospects.

Mobility data connects you with the right prospects

Mobility data is based on real driving behaviors. Know who the best prospects are before they become a customer.

Targeted marketing dollars can reduce waste

Deliver more effective ad targeting using data sourced from driver behavior monitoring. What’s more, telematics-based advertising programs give consumers the option to opt-in and share their mobility data in order to receive discounts, promotions, and other benefits. These programs give the consumer control while providing advertisers with valuable information that allows them to customize and target their offers.

This sounds fairly straight-forward, but until recently, it wasn’t an option. Insurers had to spend a significant amount of money to acquire a customer, get them to sign up for a telematics program, then let them drive for nearly two policy cycles in order to gather the information they needed to understand whether the right customers were acquired in the first place.

Now, by leveraging mobility data that includes advertising options and a database of opted-in drivers, you can know immediately (and not wait 18 months) whether someone fits your desired risk profile.

Increase lifetime value of your book of business

Having a continuous connection to your customers and prospects through driver behavior monitoring empowers you to be more selective, which will increase the lifetime value of your customer base.

Using driving behavior data in addition to proxy data for ad targeting gives you the ability to target based on actual risk. This method doesn’t lower the cost of acquisition, but it does make the money you’re spending on marketing more effective. Top-tier scored drivers have proven to be up to 5x* more profitable than the average driver over the lifetime of their policy.

This is the first time in history that the auto insurance industry has been able to benefit from leveraging driving behavior data on a mobile device to target advertising.

*Based on data from Arity’s Marketing Solutions program.

How to get started

Telematics programs, like Arity’s patented** processes within Marketing Solutions, help you leverage mobility data to discover, connect with and begin an ongoing relationship with the right people for your business from the very beginning.

It’s a whole new world for auto insurance carriers – and drivers. We’re excited to be a part of making the connections happen. To get started, contact us to learn more about how Arity’s Marketing Solutions can help you target your advertising dollars most effectively.

**U.S. Patents 10,423,982 B2 and 10,380,642 B2: Content Output Systems Using Vehicle-Based Data