Unlocking the Power of Demographic Data with Insurance Market Segmentation

September 2, 2025 By Julia Borgini

Segmenting insurance customers by demographic data like age and gender isn’t enough in today’s market. People generate so much more data now. Insurance companies can look beyond the basics and get a more detailed view into people’s lives.

These data sources allow insurers to design new products, more accurately identify risk, and help customers pay lower premiums for the exact coverage they need. They can create more detailed and accurate customer segments to use as guidelines for many processes. Marketing, sales, and product development become easier with segments.

Benefits of using demographic data for market segmentation

Every customer’s needs are different when it comes to buying insurance. Some need to insure their home, others the contents of their rented apartments. Others need health insurance, while others are looking to insure their first car.

This is where segmentation comes in.

Segmentation enhances various insurance company processes like marketing, sales, and product development. Insurance companies use it to personalize and customize each to the needs and interests of customers and prospects. It fosters a continuous process of discovery and change by the insurer for the good of the company and its customers.

It reduces the risk for insurers because of the increased knowledge they’ll develop for each segment and how they impact their business. They can analyze the data from each segment to identify new opportunities, reduce spending on resources tied to uninterested prospects, and decrease churn.

Customers are more likely to stick with the insurer because they feel valued and understood by the high level of customization. The insurer increases brand loyalty rates, engagement, and customer satisfaction.

The drawbacks of segmentation

While segmentation offers more benefits than drawbacks, it has some negatives.

The dynamic nature of demographics means segments are never static. The data must be constantly updated and segments re-evaluated to be effective, which can increase resourcing costs.
Insurance segments may be very specific and complex to manage. They need research, data analysis, and budgeting to be effective.
There’s a risk of generalizing segments and market groups. That could lead insurance companies to overlook preferences and behaviors, ultimately creating negative customer perceptions and reduced customer satisfaction.

Demographic data and segmentation can be very useful to insurers when used well.

Key demographic data impacting insurance markets

Here are a few demographic variables that are useful to insurance companies today.

Life data

Birth and death rates and life expectancy are indicative of the population by age group in given areas. They impact factors like housing needs and availability, health expenditures, and retirement savings linked to pension availability.

Geographic data

Migratory movement due to job levels, climate factors (hurricanes, tornadoes, wildfires) and other traditional factors like post-secondary school locations can impact many relevant insurance factors. For example, post-secondary schools indicate a younger population that may not need health or life insurance. Areas with higher incidents of climate events like wildfires or floods may be riskier to insure, which means higher insurance premiums for property owners.

Income data

A country’s or location’s income rate or per capita GDP directly influences the number of vehicles in an area, raising the potential for auto insurance needs. People here may also be more interested in life, health, and disability insurance due to their age, income levels, and housing levels.

Combining any of these with basic demographic data can yield a treasure trove of insights for insurance companies looking to expand their customer base or develop new products and services.

Where to get good demographic data

Insurance companies may already be sitting on a mountain of data about their customers and potential customers. Website data, surveys, emails, and CRMs are part of any modern company’s tech stack and workflow, so it’s a matter of analyzing them for relevant insights. One thing to remember about user-generated or user-gathered data is that companies are transparent in collecting and using the data. Privacy is important to consumers, but it is also required by various global laws.

There is also much publicly available data from government sources like the U.S. Census, the Federal Reserve, and the United Nations. One way to centralize data collection and analysis is by partnering with EASI. We source our data from the best sources, including the U.S. Census, the American Communities Survey, the Bureau of Labor Statistics, the Bureau of Economic Analysis, the National Health Interview Survey, and ZIP-4 postal codes. We have over 40,000 variables available to describe communities in the U.S. and the people within them from every angle.

Because we source and analyze demographic data in-house, we’re able to create industry-standard variables and reports tailored to specific industries, like insurance. Our proprietary analytical techniques combine dozens of variables to generate a highly detailed and accurate picture of our communities for insurance companies.

Real-world applications of demographic data in insurance

Here’s how some insurance companies are using demographic data for their business.

One health insurer combined age, location, and birthdates from internal and public databases in a direct mail campaign to encourage seniors 65+ and those about to turn 65 to enroll in Medicare.
A life insurance company used a social media ad platform to find people who’d just started a family or with children within a specific age range. They then designed a digital ad campaign for insurance to support their growing families.
Auto insurance companies have started using smartphone apps that monitor driver habits and combine them with customer data to offer lower insurance rates to good drivers.
A travel insurer used psychographic data like travel planning and interests to reach travelers before they leave on their trip.
A group plan insurer combined account-based marketing databases with webinar signup information to create group plans that work for specific company sizes and created an email drip campaign for those who signed up for the webinar to keep their brand name top-of-mind.

Future trends in demographic data use in insurance

The use of smartphone apps to monitor customer driving habits and offer lower rates or plans is one of the newest ways insurance companies have modernized. Others may take advantage of emerging trends like AI-driven demographic analysis and automated predictive modeling. For example, apps could combine satellite imagery with demographic data to identify new product opportunities, areas where additional insurance products may be useful, and dynamically forecast migration patterns.

Natural language processing could revolutionize how demographic data is analyzed, allowing computers to understand and interpret human language. Instead of crunching numbers, it could look at social media posts, surveys, and public records to gauge public opinion on changes in a community. Combine that with raw numbers and insurers could get ahead of their competitors quickly.

Segmenting demographic data is a good way for any insurance company to unlock insights into their customers’ evolving needs and requirements. It helps focus marketing and sales efforts, identifies new opportunities, and reduces risk. Contact EASI today to learn more about segmentation and how it can help your insurance business.