It is time for insurers to take personalization seriously.
In every industry, customer experience is becoming highly personalized, and many consumers will not even engage with a brand unless the message and offer is tailored to their needs and situation.
Insurers seeking to deliver personalized services need to have a better grasp of customers’ behaviors and actions, and use this insight to offer more frequent and higher-value interactions.
Accenture research indicates that 80 percent of insurance customers are looking for personalized offers, competitive pricing and recommendations from their auto, home or life insurance providers, and an additional 77 percent are willing to provide usage and behavior data in exchange for lower premiums, quicker claims settlement or insurance coverage recommendations.
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Digital and retail giants such as Google and Walmart are already ahead, collecting large quantities of consumer data via smartphones, home hubs, shopping loyalty programs and other sources. By doing so, they have the intelligence to identify where customers are located, how they manage their personal lives and possessions i.e. their home and vehicle, and what life stage they are at. In comparison, less than a quarter (22 percent) of insurers have launched personalized or real-time digital or mobile services to date.
It’s clear that many insurers are failing to capitalize on the opportunity, opening up potential revenue to more forward-thinking competitors and cross-industry players who are delivering levels of personalization that many insurers would struggle to match.
Adopting a new mentality
Today’s insurers are hindered by the fact that the industry has traditionally maintained a low frequency of interactions with customers. Product-oriented cultures, reliance on independent distribution partners, complex organizational structures and outdated technologies also provide challenges.
Insurers that strive to provide a superior customer experience must migrate from a transactional mentality to a relationship mentality. They need to think beyond insurance related products and services, and the limited range of insurance process-related customer interactions like bills, payments, renewals and claims. Instead, they should look at the bigger issues, such as helping customers live the sort of lifestyles they want, prevent losses, or to take the necessary steps to improve their financial well-being. By doing so, they will change customer perception and drive growth in new product and service categories.
Capitalizing on customer personalization
To take advantage of the opportunities that greater personalization enables, insurers need to start by formulating and implementing an actionable customer strategy. Advanced analytics capabilities will enable insurers to create precise and actionable customer microsegments and propensity models based on demographics, life stage, needs and behavior. From this, insurers can identify segment-specific opportunities to personalize offers, messaging, pricing and recommendations to individual customers across physical locations, web, mobile, and call center channels. Insurers will need to ensure that their marketing processes, tools, organizations, and agency relationships can cost effectively scale up to enable greater content and message variations necessary to deliver more personalized, omni-channel experiences.
Insurers can also benefit from developing a test-and-learn capability that can operate at speed. Once success is achieved on a small scale, they will need a customer-centric operating model to rapidly integrate the learnings across channels and lines of business, where appropriate.
Leading insurers are starting to take this approach to deliver increased levels of personalization. One major insurance provider, for example, is working to combine profiles of customers’ past and current transactions, and content from social channels, to create a personalized experience on its mobile app. Another insurer is developing customer microsegments to help improve the returns on customer retention and cross-sell campaigns and offers.