Connected Wellness: Livening-up Life Insurance

LATEST THINKING

Most people rarely engage with life insurers after purchasing a policy, aside from making billing inquiries or updating contact information. With customer interactions so infrequent, insurers cannot be customer-centric, especially by the standards of today’s always-on digital landscape.

They face a compensation value proposition dilemma. Carriers cannot afford to pay out more claims to increase customer interactions. But without more interactions, higher cross-sell rates, product and relationship stickiness—even relevancy itself—are at risk. So is growth. With connected wellness, insurers can improve frequency and quality of customer interactions to cultivate more meaningful customer relationships that touch people’s daily lives.

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KEY FINDINGS

The fundamentals of connected wellness offer new advantages to life insurers and consumers.

Different relationships. In addition to more intense customer interactions, carriers can create value by influencing risk throughout the policy term, improving insured population risk profile through self-selection, gaining more insight into customer behavior and developing ecosystem partnerships.
New markets. Connected wellness can help life insurers approach new markets, interacting with underserved customers more often, improving underwriting results and increasing share of wallet—and share of mind. Our analysis suggests that millennials and seniors are top targets for connected wellness.
Ecosystem power. Carriers do not have to—and should not—attempt to choose one winner. Nor should they go it alone and attempt to build from the ground up. Instead, insurers need to develop an open business architecture that creates a backbone for orchestrating or participating in a connected wellness ecosystem.

44 percent of consumers are likely to consider connected insurance services to help them become and stay healthier.

78 percent of consumers are interested in insurers helping them or aging relatives live safely in their homes.

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RECOMMENDATIONS

The move to connected wellness goes beyond putting devices into customers’ hands. Carriers must:

Crystallize the connected wellness value proposition.

Determine who to be, which markets to serve, and what customer interaction points are critical. Then, align capabilities to drive that unique value to market.

Lay the groundwork to innovate for top targets.