Insurance-based marketing (IBM): A prevalent marketing strategy

Insurance-based marketing (IBM) is the marketing of products and services as being available for free or at a strongly reduced price due to coverage by clients’ insurance plans. This paper introduces IBM, identifies its main characteristics and presents a theoretical model that can explain IBM’s marketing function. A taxonomy with examples renders more insight into the different formats that IBM takes on in practice. Two studies into the prevalence of IBM for windshield repair and flu vaccination in different countries across the world provide evidence for the prevalence of IBM. Finally, a discussion of the ethical considerations highlights the benefits of IBM for clients’ information provision, but also the risks of higher premiums through the encouragement of moral hazard. Diverse kinds of stakeholders can find value in thinking through their options to include IBM in their marketing mix.