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How Inflation Resilience Data Can Shape Insurance Marketing

We have all seen the news lately about the recent surge in US inflation and the lingering supply chain issues related to COVID-19. It is easy to get caught up in the bad news and get a feeling of helplessness, unable to control this inflationary pressure. And although inflation is hitting us all – we are all paying more at the gas station and in the grocery store – Merkle has developed the Inflation Resilience Dashboard to drill down and understand the impact of inflation on a county-by-county basis. The good news is not all counties are equally vulnerable to inflationary pressures.

Of course, not everyone in these resilient counties is doing well.  And not everyone in the more impacted counties is doing poorly. But the geographic patterns in this inflation dashboard show some interesting resilience patterns.

The first pattern is that the coastal areas have an increased resilience. This makes some sense based upon what we know about living near those beautiful ocean views – it just costs more to live there. My daughter just graduated from college and has a summer research job collecting data on the North Carolina coast. She has struggled to find housing, as just a room in someone’s house is nearly $1,000 a month – and even those are hard to find. It is easy to understand that the coastal areas would have a different resilience pattern than other areas of the country.

If you look inland on the dashboard, there are other “hip” locations to live that are exhibiting significant inflationary resilience as well. Let’s consider Austin, Texas. That city has seen a huge influx of residents in the last few years, as many influential people (and influencers) have moved there. Similarly, we also see high resilience jumping out of the dashboard for Nashville, Tennessee, another place that seems to be able to weather economic storm, and a place where many of the musicians I have listened to for decades seem to live.

We also see inflationary resilience in the Rural West, which may be somewhat surprising until you consider that it’s where many Baby Boomers are retiring. States like New Mexico, Arizona, Nevada, Idaho, and Wyoming were some of the top inbound states for retirees in 2021. Many Zoom Towns, where remote workers are choosing to live and work, are also located in the western US.

So, how might insurance companies leverage these natural islands of resilience? We see a few areas that might be attractive.

Local Insurance Agents Need a Unique Set of Sales Tools

Agents in the field need to be prepared to handle this potentially different segment of consumers. As resilient customers and resilient prospects move to these resilient areas, your field team may need additional training and marketing collateral to have an appropriate suite of products and talking points to effectively communicate your policies and their benefits. These customers and prospects may not be as price sensitive as other consumers and may require a different level of service or additional benefits to sway them in their decision-making process.  Being able to communicate with them effectively may require alterations to existing strategies.

Consider the Possibilities of Second Homes

One thing these resilient areas have in common is that they are a logical place to have a second home. Whether it is an ocean home or a hip getaway for a retiree, a second home may be just the thing for inflation-resilient families.  Offering different policies, or just changing your messaging in these areas to introduce the concepts of second homes, may be an interesting concept to explore.

Ancillary Coverage Options for Leisure Vehicles

Particularly in the Rural West, inflationary-resistant families may be purchasing new leisure vehicles that need additional insurance. Many enjoy riding motorcycles and ATVs as part of their adventures. And as the resilient move to these areas, they have the incremental cash needed to purchase these items – and will therefore need additional insurance to cover them. Having bundled products with these ancillary coverages will be important.

Travel Insurance

Even though the resilient are enjoying their time in these locations, it doesn’t mean that they want to stay there. Travel is definitely rebounding, with people ready to “push play” on their paused travel plans. Many are finally ready to take that trip to Europe, Asia, or Africa that’s been on hold for a few years.

But are they? What if the pandemic roars back and the trip needs to be paused again? Travel insurance may be an ideal product to offer to the resilient.

Inflation affects us all.  But not everyone reacts to it or is affected by it in exactly the same way. Use the Inflation Resilience Dashboard to understand where resilience is strong and try some of these ideas. It could help with some of the challenges that the current economic situation has brought on your business.