Consumers crave personalization from their insurance providers and are willing to switch companies to get it. New competitors, including digital giants, are rushing to fill the gap.
To retain customers and deliver personalized services, insurers have to better understand their customers’ actions and behaviors, and use this knowledge to provide more frequent and high-value interactions.
But most home, auto and life insurance providers are missing the opportunity. Many struggle to truly know more than basic details about their customers.
What’s more, only 22 percent have launched personalized, real-time digital or mobile services to date. These include:
Offers based on customer needs and products that they already own.
Messages that customers find relevant and that build on their relationship and previous interactions with the insurer.
Pricing that dynamically considers consumers’ behaviors, usage and loss preventative measures taken.
Recommendations and incentives to prevent losses or reduce loss severity.
For today's digital customers, everything is personal. But so far, insurance companies aren't picking up the hint. So what can insurance companies do to close the gap? Move beyond transactions to relationships.
Delivering personalized services has become an imperative for insurance companies.
More than three quarters (77 percent) of consumers are willing to provide usage and behavior data in exchange for lower premiums, quicker claims settlement or insurance coverage recommendations.
Historically, though, the insurance industry has not delivered these personalized services. One fifth (21 percent) of insurance consumers say their providers do not tailor customer experiences at all.
It’s time for insurers to think beyond insurance—migrating from a transactional mentality to a relationship mentality. How can insurers help customers live the sort of lifestyle they desire? How can they help customers prevent losses or act more quickly when events occur? How can they persuade customers to take the steps necessary to improve their financial well-being?
To provide omni-channel personalization services, insurers will need to change organizational structures and business models. They also must upgrade to digital technologies and leverage real-time data from Internet of Things devices.
Form and implement an actionable customer segmentation strategy.
Implement advanced analytics and identify segment-specific opportunities to personalize services across channels
Develop an agile test-and-learn capability that can operate at speed.
Migrate to a customer-centric operating model to rapidly integrate learnings across channels and lines of business.
Tap into rapidly forming IoT infrastructure to obtain real-time data.
Build relationships with new business partners and join ecosystems to deliver services that go beyond insurance.
Create a continuous loop of interaction with customers that provides protection and services for their everyday needs.
Taking this approach and personalizing offers, messages, pricing and recommendations—along with increased frequency of contact--will be a competitive differentiator in the digital age.