Beyond Price: The Rise of Customer-Centric Marketing in Insurance

Over the past decade, U.S. auto insurers have increased their marketing expenditure 15 percent each year. Spending totaled almost $6 billion in 2011 alone. A simple logic propelled this marketing “arms race.” As one carrier increased its level of spend to gain customer awareness, others responded in kind to keep up. But the equation omits a true reckoning of how effective the spending is. The explosion in marketing spend has had no measurable impact on industry premiums, which have remained stagnant. And more than half of the marketing dollars spent in the last 10 years came from carriers that did not gain share. Clearly, in their eagerness for top-of-mind consideration, auto insurers are missing something crucial about what their customers need, how they shop and how they make decisions. The disconnection of escalating marketing expenditure and the realities of consumer behavior raises fundamental questions for senior leaders of auto insurance carriers, as evidenced by the findings of recent McKinsey research: • Marketing spend in auto insurance is targeted disproportionately at the 30 percent of auto insurance buyers who are most price-sensitive and least loyal. Why have insurers aimed so much marketing firepower at this one segment? What determines whether the other 70 percent wil remain loyal or shop around? How can insurers reach this majority and motivate them to switch? • Consolidation of market share at the top of the industry appears set to accelerate, as shoppers typically consider only four or five brands as they begin their shopping journey. What sustainable options and models exist for insurers outside of the top five? What alternatives exist for insurers unwilling or unable to compete in the current spend-for-consideration model? • Digital and social media channels influence 40 percent of consumer decisions made during the consideration phase. Can auto insurers – especially those outside the top five – use digital channels to influence shoppers during the active evaluation phase in the consumer journey? • Car insurance retention hovers around 90 percent, yet virtually all marketing spend is focused on acquisition. Given escalating acquisition costs, and the fact that strength of loyalty within a carrier’s policyholder base varies significantly, how do carriers find the right level of marketing spend and the optimal balance between attracting new customers and holding onto their valued policyholders? The answers to these questions wil differ for individual insurers, based on their current position and business model. But they are questions that al insurers should address as they adapt to changes in how customers evaluate and purchase an auto insurance policy. This report is based on the results of McKinsey’s 2012 U.S. Auto Insurance Buyer Survey and numerous interviews with marketing executives. It highlights new research on auto consumer needs and behaviors, and describes the core marketing capabilities that will define industry leaders for years to come.

My question is this, given the findings of this report, why doe's the top five Insurance carrier's continue there focus and marketing efforts on shoppers who are only price driven? It seems to me like a waste of time and money; in which ultimately drives the premiums up. That's not to say that other factors don't drive the premium up as well.

Lies, Omissions, Obfuscations

If a lie is deception, omission is dereliction, and obfuscation is to make unclear; then all of these lead to the same result.

The differences are found in intention, negligence, and knowledge.

Make sure that you are comfortable with what you are putting out there.  Knowledge is the only one of these differences that you will have no choice about once the event is upon you.

Now, how do I get back to sleep?

Germany did it fast. Lets not go down this same path.

1938 Austria

The author of this article lives in South Dakota and appears to be very active in attempting to maintain our freedom. I encourage everybody to read this article and pass it along. I see so many parallels in this country-are we going to sit by and watch it happen? Spread the word; also contact your congressional reps; vote them out if they don't do what they should. Google Kitty Werthmann and you will see articles and videos.

Truly is the Greatest Country in the World. Don't Let Freedom Slip Away By: Kitty Werthmann

What I am about to tell you is something you've probably never heard or will ever read in history books.

I believe that I am an eyewitness to history. I cannot tell you that Hitler took Austria by tanks and guns; it would distort history. We elected him by a landslide - 98% of the vote.. I've never read that in any American publications. Everyone thinks that Hitler just rolled in with his tanks and took Austria by force.

In 1938, Austria was in deep Depression. Nearly one-third of our workforce was unemployed. We had 25% inflation and 25% bank loan interest rates

Farmers and business people were declaring bankruptcy daily. Young people were going from house to house begging for food. Not that they didn't want to work; there simply weren't any jobs. My mother was a Christian woman and believed in helping people in need. Every day we cooked a big kettle of soup and baked bread to feed those poor, hungry people - about 30 daily.

The Communist Party and the National Socialist Party were fighting each other. Blocks and blocks of cities like Vienna , Linz , and Graz were destroyed. The people became desperate and petitioned the government to let them decide what kind of government they wanted.

We looked to our neighbor on the north, Germany , where Hitler had been in power since 1933. We had been told that they didn't have unemployment or crime, and they had a high standard of living. Nothing was ever said about persecution of any group -- Jewish or otherwise. We were led to believe that everyone was happy. We wanted the same way of life in Austria . We were promised that a vote for Hitler would mean the end of unemployment and help for the family. Hitler also said that businesses would be assisted, and farmers would get their farms back. Ninety-eight percent of the population voted to annex Austria to Germany and have Hitler for our ruler.

We were overjoyed, and for three days we danced in the streets and had candlelight parades. The new government opened up big field kitchens and everyone was fed.

After the election, German officials were appointed, and like a miracle, we suddenly had law and order. Three or four weeks later, everyone was employed. The government made sure that a lot of work was created through the Public Work Service.

Hitler decided we should have equal rights for women. Before this, it was a custom that married Austrian women did not work outside the home. An able-bodied husband would be looked down on if he couldn't support his family. Many women in the teaching profession were elated that they could retain the jobs they previously had been required to give up for marriage.

Hitler Targets Education - Eliminates Religious Instruction for Children:

Our education was nationalized. I attended a very good public school. The population was predominantly Catholic, so we had religion in our schools. The day we elected Hitler (March 13, 1938), I walked into my schoolroom to find the crucifix replaced by Hitler's picture hanging next to a Nazi flag. Our teacher, a very devout woman, stood up and told the class we wouldn't pray or have religion anymore. Instead, we sang "Deutschland, Deutschland, Uber Alles," and had physical education.

Sunday became National Youth Day with compulsory attendance. Parents were not pleased about the sudden change in curriculum. They were told that if they did not send us, they would receive a stiff letter of warning the first time. The second time they would be fined the equivalent of $300, and the third time they would be subject to jail. The first two hours consisted of political indoctrination. The rest of the day we had sports. As time went along, we loved it. Oh, we had so much fun and got our sports equipment free. We would go home and gleefully tell our parents about the wonderful time we had.

My mother was very unhappy. When the next term started, she took me out of public school and put me in a convent. I told her she couldn't do that and she told me that someday when I grew up, I would be grateful. There was a very good curriculum, but hardly any fun - no sports, and no political indoctrination. I hated it at first but felt I could tolerate it. Every once in a while, on holidays, I went home. I would go back to my old friends and ask what was going on and what they were doing. Their loose lifestyle was very alarming to me. They lived without religion. By that time unwed mothers were glorified for having a baby for Hitler. It seemed strange to me that our society changed so suddenly. As time went along, I realized what a great deed my mother did so that I wasn't exposed to that kind of humanistic philosophy.

Equal Rights Hits Home:

In 1939, the war started and a food bank was established. All food was rationed and could only be purchased using food stamps. At the same time, a full-employment law was passed which meant if you didn't work, you didn't get a ration card, and if you didn't have a card, you starved to death. Women who stayed home to raise their families didn't have any marketable skills and often had to take jobs more suited for men.

Soon after this, the draft was implemented. It was compulsory for young people, male and female, to give one year to the labor corps. During the day, the girls worked on the farms, and at night they returned to their barracks for military training just like the boys. They were trained to be anti-aircraft gunners and participated in the signal corps. After the labor corps, they were not discharged but were used in the front lines. When I go back to Austria to visit my family and friends, most of these women are emotional cripples because they just were not equipped to handle the horrors of combat. Three months before I turned 18, I was severely injured in an air raid attack. I nearly had a leg amputated, so I was spared having to go into the labor corps and into military service.

Hitler Restructured the Family Through Daycare:

When the mothers had to go out into the work force, the government immediately established child care centers. You could take your children ages 4 weeks to school age and leave them there around-the-clock, 7 days a week, under the total care of the government. The state raised a whole generation of children.. There were no motherly women to take care of the children, just people highly trained in child psychology. By this time, no one talked about equal rights. We knew we had been had.

Health Care and Small Business Suffer Under Government Controls: Before Hitler, we had very good medical care. Many American doctors trained at the University of Vienna .. After Hitler, health care was socialized, free for everyone. Doctors were salaried by the government. The problem was, since it was free, the people were going to the doctors for everything. When the good doctor arrived at his office at 8 a.m., 40 people were already waiting and, at the same time, the hospitals were full. If you needed elective surgery, you had to wait a year or two for your turn. There was no money for research as it was poured into socialized medicine. Research at the medical schools literally stopped, so the best doctors left Austria and emigrated to other countries.

As for healthcare, our tax rates went up to 80% of our income. Newlyweds immediately received a $1,000 loan from the government to establish a household. We had big programs for families. All day care and education were free. High schools were taken over by the government and college tuition was subsidized. Everyone was entitled to free handouts, such as food stamps, clothing, and housing.

We had another agency designed to monitor business. My brother-in-law owned a restaurant that had square tables. Government officials told him he had to replace them with round tables because people might bump themselves on the corners. Then they said he had to have additional bathroom facilities. It was just a small dairy business with a snack bar. He couldn't meet all the demands. Soon, he went out of business. If the government owned the large businesses and not many small ones existed, it could be in control.

We had consumer protection. We were told how to shop and what to buy. Free enterprise was essentially abolished. We had a planning agency specially designed for farmers. The agents would go to the farms, count the live-stock, then tell the farmers what to produce, and how to produce it.

"Mercy Killing" Redefined:

In 1944, I was a student teacher in a small village in the Alps . The villagers were surrounded by mountain passes which, in the winter, were closed off with snow, causing people to be isolated. So people intermarried and offspring were sometimes retarded. When I arrived, I was told there were 15 mentally retarded adults, but they were all useful and did good manual work. I knew one, named Vincent, very well. He was a janitor of the school. One day I looked out the window and saw Vincent and others getting into a van. I asked my superior where they were going. She said to an institution where the State Health Department would teach them a trade, and to read and write. The families were required to sign papers with a little clause that they could not visit for 6 months. They were told visits would interfere with the program and might cause homesickness.

As time passed, letters started to dribble back saying these people died a natural, merciful death. The villagers were not fooled. We suspected what was happening. Those people left in excellent physical health and all died within 6 months. We called this euthanasia.

The Final Steps - Gun Laws:

Next came gun registration.. People were getting injured by guns. Hitler said that the real way to catch criminals (we still had a few) was by matching serial numbers on guns. Most citizens were law abiding and dutifully marched to the police station to register their firearms. Not long after-wards, the police said that it was best for everyone to turn in their guns. The authorities already knew who had them, so it was futile not to comply voluntarily.

No more freedom of speech. Anyone who said something against the government was taken away. We knew many people who were arrested, not only Jews, but also priests and ministers who spoke up.

Totalitarianism didn't come quickly, it took 5 years from 1938 until 1943, to realize full dictatorship in Austria .. Had it happened overnight, my countrymen would have fought to the last breath. Instead, we had creeping gradualism. Now, our only weapons were broom handles. The whole idea sounds almost unbelievable that the state, little by little eroded our freedom

After World War II, Russian troops occupied Austria . Women were raped, preteen to elderly. The press never wrote about this either. When the Soviets left in 1955, they took everything that they could, dismantling whole factories in the process. They sawed down whole orchards of fruit, and what they couldn't destroy, they burned. We called it The Burned Earth. Most of the population barricaded themselves in their houses. Women hid in their cellars for 6 weeks as the troops mobilized. Those who couldn't, paid the price. There is a monument in Vienna today, dedicated to those women who were massacred by the Russians. This is an eye witness account.

"It's true..those of us who sailed past the Statue of Liberty came to a country of unbelievable freedom and opportunity.

America Truly is the Greatest Country in the World. Don't Let Freedom Slip Away

"After America , There is No Place to Go"

Please forward this message to other voters who may not have it.

What does money teach us about importance?

$1 Trillion for Health Reform and only $15 Billion for Jobs?


When Scott Brown became the first Republican Senator elected in Massachusetts for decades the political earth shook.  This seat was held by Ted Kennedy who made it his mission to see health reform passed into law.  The Democrats reaction was a realization that their priority of health reform was not apparently the priority in the public.  Polls seemed to bear this out showing health reform second or third on the list.  The Democrats regrouped and said from that point on the priority would be jobs, jobs, jobs.

The Democrats in the House today voted for a $15 billion jobs creation package in a 217-201 vote.  That is approximately 1% of the amount to be spent health reform and 2% of the cost of the bank bailouts.  This is a commitment to jobs?

Further, this bill in the House barely sqeaked by in a 217-201 vote.  Call me crazy but that vote margin does not impress and leave an impression that job creation is really a priority.  The less than zealous focus on jobs by Democrats was again shown when the Senate voted down Scott Brown's amendment to cut payroll taxes by by $80 billion with unallocated TARP money to spur the economy and job growth.  This after Brown reached out to Democrats by supporting their job bill.  Were the tax cuts approved, this and the jobs bill would still be only about 13% that spent on bailing out banks.


There is little evidence of bipartisanship in the House and Senate even on the public's top concern of job creation.  Scott Brown's amendment may well have been voted down because he is a Republican, and in the slash and burn politics in DC, you must destroy the other party no matter the impact on the country.  In this case Democrats won by defeating the amendment, and we all lost because even less money will be devoted to jobs creation.  Worse still is the fact that the Democrats jobs bill used to be about $80 billion AND bipartisan in the Senate until Harry Reid unilaterally tossed the agreement for a puny $15 billion bill instead.  And they say Washington is broken and tone deaf to the voters.

And now we are right back at health reform.  The Democrats epiphany about jobs lasted all of about 4 weeks before they went right back to health reform trying to use the reconciliation process the pass the unpopular bill.

Thanks to PoliticalCentrist.com for this article.

Washington Update

Over the past year, Democrats have fought passionately for universal coverage.  They have fought for it even while the country is more concerned about the economy, and in the face of serial political defeats.  They have fought for it even though it has crowded out other items on their agenda and may even cost them their majority in the House.

And they’ve done it for almost no votes.  The 30 million who would be covered under the Democratic proposals are not big voters, while the millions who would pay for the coverage are strikingly unhappy.

There is something morally impressive in the Democrats’ passion on this issue.  At the same time, it’s interesting to compare it to their behavior on other issues in which they have no emotional investment.

For example, Democrats say the right thing when it comes to helping small businesses create jobs, but there’s no passion there.  For the past year, small business owners have been screaming that they can’t hire people because they don’t know what the rules will be on health care, finance or energy.  Democrats hear them, but those concerns take a back seat to other priorities.

Small business owners have been screaming about the health care bill that forces them to offer coverage or pay a $2,000-per-employee fine but doesn’t substantially control rising costs.  Democrats hear their concerns, but push ahead because getting a health care bill is more important.

Then there is the larger issue of exploding federal deficits.  A few Democrats seem to be genuinely passionate about this, President Obama says he is amongst them.  He has fought tenaciously to preserve a commission that would shift the blame for restraints on Medicare spending.  But most of those in Congress have no desire to own that same blame.

They’re going through the motions.  They’ve stuffed the legislation with gimmicks and dodges designed to get a good score from the Congressional Budget Office but don’t genuinely control runaway spending.

There is the doc fix dodge.  The legislation pretends that Congress is about to cut Medicare reimbursements by 21 percent.  Everyone knows that will never happen, so over the next decade actual spending will be $300 billion higher than paper projections.

There is the long-term care dodge.  The bill creates a $72 billion trust fund to pay for a new long-term care program.  The sponsors count that money as cost-saving, even though it will eventually be paid back out when the program comes on line.

There is the subsidy dodge.  Workers making $60,000 and in the health exchanges would receive $4,500 more in subsidies in 2016 than workers making $60,000 and not in the exchanges.  There is no way future Congresses will allow that disparity to persist.  Soon, everybody will get the subsidy.

There is the excise tax dodge.  The primary cost-control mechanism and long-term revenue source for the program is the tax on high-cost plans.  But Democrats aren’t willing to levy this tax for eight years.  The fiscal sustainability of the whole bill rests on the naïve hope that a future Congress will have the guts to accept a trillion-dollar tax when the current Congress wouldn’t accept an increase of a few billion.

There is the 10-6 dodge.  One of the reasons the bill appears deficit-neutral in the first decade is that it begins collecting revenue right away but doesn’t have to pay for most benefits until 2014.  That’s 10 years of revenues to pay for 6 years of benefits, something unlikely to happen again unless the country agrees to go without health care for four years every decade.

There is the Social Security dodge.  The bill uses $52 billion in higher Social Security taxes to pay for health care expansion.  But if Social Security taxes pay for health care, what pays for Social Security?

There is the pilot program dodge.  Admirably, the bill includes pilot programs designed to help find ways to control costs.  But it’s not clear that the bill includes mechanisms to actually implement the results.  This is exactly what happened to undermine previous pilot program efforts.

The Democrats not see themselves as having been completely irresponsible.  It’s just that as the health fight has gone on, their passion for coverage has swamped their less visceral commitment to reducing debt.  The result is a bill that is fundamentally imbalanced.

This past year, we’ve seen how hard it is to even pass legislation that expands benefits.  To actually reduce benefits and raise taxes, we’re going to need legislators who wake up in the morning passionate about fiscal sanity.  The ones we have now are just making things worse.

The bulk of this was taken from a NYT article.

Our Health Care

Health care is a fungible good; nothing more.  It's a result of capitalists doing what they do to make progress and money in the process.  President Obama will stop that progress to institute a mediocre system where everyone is treated exactly the same regardless of input, output, or creativity or productive effort or results.  No one is entitled to the efforts of others (like doctors and researchers, for example).  He's a Socialist, a system that diminishes rewards in exchange for reduced efforts of the productive.  People will still suffer and endure pain.  In fact, any of the proposed health care bills will make MORE people suffer, not fewer, because of reduced incentives to innovate.  Innovators have skin in the game and expect rewards; rewards that will not be forthcoming under the President's bill, whichever one it is.


Lawyers have the unique persepctive they can command others that will obey due to the force of law and the threat of incarceration or fiscal damage.  But they have no command over the creative to create, or way to induce the bright to peruse medicine as a career instead of the banking so many seem to detest of late.  Smart people will do what is best for them; that is the rule of the jungle whether you like it or not.  Society should never have any legitimate interest in a population's health care outside of public health.  We all die, some sooner than later.  Life's tough.  Now buck up campers and get back out there and do something productive.

The scariest thing I learned today

The curtains on the shower stalls of the men's locker room in the House gym have been removed.  Can someone please get this mental picture out of my head?

Obama openly calls for Reconciliation on Health Care

I called this one, but that was no special feat.  Obama made it clear in his public address today that he would be using the reconciliation process to force the passage of Health Care.  The process that will be used going forward is not easy or simple, but here it is in a nut shell.

First.   Obama has proposed some modifications to the bill passed in the Senate.  Due to the modifications, the bill must pass another Senate vote.  This is why the reconciliation process will have to be used.

Second.   The modified Senate bill must pass the House of Representatives with a simple majority.  For those that do not know, this is normal operating procedure in the House.  Only the Senate requires a super majority.  This should pose a challenge as the change in abortion funding between the two bills is a hotly contested issue on the Democratic side.  However, Nancy Pelosi has assured the White House that she can produce the votes needed.

Third.  Reconciliation the "Nuclear Option" - In this approach, the bill that passes in the House would then be voted on in the Senate using the reconciliation process.  This is the riskiest part of all.  Normally this procedure is used only for budgetary measures that impact up to a 5 year budget.  Therefore, the CBO would be asked to score the Health Care plan over a 5-year period instead of 10.  This will probably produces some very interesting numbers.  This 5-year report could prove unsavory enough that the embattled Reid would not be able to muster even the simple majority necessary. 

Obama may have forgotten the Massachusetts lesson already but many Democrats, in tough election battles this year, have not. 

The EVIL Sen. Jim Bunning

Well, here is what happens when you are so involved in playing the lame duck that you don't read legislation.  Bunning decided to try to make a point at exactly the wrong time.  Congress adopted pay-go legislation less than a month ago, violated it for the first time the very next week, and he was just trying to make a point about this second violation in only the first month since it was signed into law.  Laws certainly do affect people like me and you differently than they do those in Congress.

When you have a $3.5 Trillion budget and you suddenly decide that you would like to extend unemployment benefits, highway project funding, and various other miscelaneous items (I am not gonna ready the whole bill), you simply gotta cut the money from some other programs.  However, in typical Capitol Hill fashion, although there were plenty of people lining up to take credit for handing out more money (that simply does not exist); there was no one looking for the cuts to offset the new spending.  Bunning's point was not to have 2,000 highway workers furloughed for two days (for the record, these are not the actual workers that you see on the highways.  These guys were the government oversight of those workers. (feeling a little less bad about it now aren't you?)) which they were, nor was it to have unemployment benefits cutoff (although for the record I am starting to wonder if they ever do actually end, they are now up to 2 years).  His point was that it is utterly useless to make a rule and then turn right around and break it.

I gotta say that I think he is right.  Now now, calm down.  I am not saying that he should have caused all this ruckus.  What I am saying is that Capitol Hill needs to get their priorities straight.  I am sure what actually happened is that the party in power did not know that this funding deadline was looming after all, they have their hands full trying to get a Health Care bill passed that a majority of Americans (even those living in the bluest of states) do not want.  This loss of focus on impending deadline caused this particular one to sneak up on them.  However, once they realized that they had basically warped weeks into the future they cobbled this $10 Billion bill together just in time.  Forget the motions and procedures that are the norm, forget the partisan politics being bandied about by both sides; this is a REAL EMERGENCY!!  We gotta get it done NOW!  Wait haven't I heard all this BS before?

Bunning's theatrics forced an actual vote on this bill.  The real trick here is that they tried to pass it by universal consent so that nobody would have to take responsibility for their individual vote.  Bunning forced the vote and now the hypocrites are out in the open.  Completely exposed by the very tricks they were trying to use to cover their tracks.

The "real" Healthcare Issues

There are two problems with healthcare.  The problem "voters" want fixed is rising premiums, rising costs, etc.  The fact is that most of them have insurance, and every year it costs them more than the year before.


The problem progressives want to fix is that 47 million people don't have insurance.  Of course, this is not an entirely different problem -- assuming that health insurance is something people want, then it stands to reason that we got costs under control people would actually buy their own insurance.

In other words, if you solve the problem "voters" want solved, then the problem progressives want to solve actually becomes smaller.

This presents its own problem, since solving the 47 million problem is just an excuse for universal healthcare.  Progressives don't want any particular problem solved, they want a specific solution.  Any solution that threatens to increase coverage (by lowering prices, for example) reduces the 47 million, and along with them, the "need" for universal care.

I know people who honestly believe that progressives actually want high unemployment because it increases the number of uninsured.  I don't know if that's true.  But suddenly it doesn't seem so improbable that progressives rely on expensive healthcare dysfunction to make their costly utopian liberal healthcare reform seem "revenue neutral."