The Customer Effect

Relay launches annuity product direct to consumer

  • Group 1001, an insurance holding company, plans to launch new plans and products.
  • The first, Relay, is an innovative annuity marketed directly to consumers.
Relay launches annuity product direct to consumer

Relay launched a new annuity product available online directly to consumers.

The new brand didn’t just launch a plain vanilla annuity, either. Its curiously innovative product is an immediate annuity tied to a Relay Visa Prepaid Card that offers very aggressive cash-back rewards. People can use the Relay website to build a custom plan that will provide for a monthly income stream over a three to seven year period. After a plan is funded, monthly payouts get loaded up on a prepaid Relay Card. When users spend this money on their card, they’ll earn 3 percent to 13 percent cash-back on all their purchases. As long as these transactions don’t require a PIN or ACH, there are no category exceptions, blackout dates, or no annual fees for Relay annuity holders.

“We find it to be an innovative way to bring together concepts people use every day,” said Andres Barragan, chief experience officer at Group 1001, Relay’s parent company, which includes $37 billion Delaware Life Insurance Company.

Customer research targets planner segment

By talking to customers, Relay found a certain segment of consumers was quite frustrated about how little savings accounts earn. Among this group, which Relay calls ‘smart spenders’, the firm saw a need to earn something in situations where consumers don’t normally earn, like when they pay their utility or mobile telephone bills.

“From this perspective, we saw that an immediate annuity and cash back would be great to bake into a single product,” said Barragan.

It’s a bold move for the new consumer finance brand: trying to sell annuities directly to consumers. For an insurance product that has always ‘been sold, not bought’, no one’s really succeeded bringing these retirement and estate planning products online.

Innovating product and organization

Group 1001 has big plans for Relay. It’s part of a larger strategy that taps into the parent firm’s own insurance business, Delaware Life Insurance Company, for policy administration, licenses and back office. Relay isn’t so much an attempt to disrupt the insurance business as it is an opportunity to expand it to new audiences, like smart spenders that don’t generally work with agents or advisors and may not have accumulated enough wealth to attract the attention of a traditional player.

“One of our strategies is to build our own brands as manufacturers and distributors,” said Barragan. “Our innovation is the d2c part. We’re working on developing from scratch a full tech stack that’s API compatible so we can offer insurance products through any type of interface. We’re open to being just manufacturers of insurance products and letting our products be distributed through other entities, like robos.”

CPG meets insurance

As chief experience officer at Group 1001, Andres Barragan isn’t a typical insurance industry veteran. Barragan’s roots are deep in consumer packaged goods, cutting his marketing teeth at Procter and Gamble. Most recently, he served as the svp of marketing at Fidelity Investments. Hiring someone who spoke today’s consumer’s language was by design — Group 1001 believes it can succeed in marketing products direct to consumers by positioning insurance differently.

“I feel consumers are attracted to brands that speak their language,” he said. “As a marketer, you want to touch their emotional hot buttons and stand for something. They want to buy from brands that have a mission and a point of view.”

In this case, Relay is built around a segment that spends a lot of time being deliberate about saving money, planning for their future, and spending wisely. Planners are organized online with clear influencers, which Relay is working with to help new customers discover the new offering.

The Customer Effect

Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? 

  • The unbanked and underbanked do have more options now.
  • But many of those options are too expensive.
Guest Author | February 05, 2019
The Customer Effect

Targeting stressed out Americans, PurePoint launches savings campaign with Olympic gold medalist

  • Saving is hard and it's stressful.
  • PurePoint's new ad campaign shows how world class athletes succeed.
Zack Miller | January 21, 2019
The Customer Effect

After Temenos acquisition, Avoka pushes hard on the growth button

  • Late 2018, core banking software firm Temenos bought Avoka.
  • The combined entity is focused on expanding Temenos in the U.S.
Zack Miller | January 16, 2019
The Customer Effect

Small banks find innovative ways to innovate

  • Small banks lack the human and financial resources of larger firms.
  • That hasn't stopped them from trying to innovate.
Zack Miller | January 14, 2019
The Customer Effect

Credit Karma’s Kenneth Lin on building a billion dollar brand

  • Kenneth Lin launched Credit Karma 11 years ago.
  • His company's growth provides a blueprint for successful fintech companies.
Zack Miller | December 03, 2018
More Articles