All too often, the relationship between insurers and policyholders is experienced as adversarial — a dynamic that has driven down customer engagement and damaged insurers’ bottom lines. How can insurers break this stalemate and achieve a win-win structure that benefits all parties?
A big part of the answer lies in gamification.
Simply put, gamification is the application of gaming principles in other walks of life. In the workplace, for example, gamification could mean seeing assignments as challenges to be completed, enabling employees to ‘level up’ and reach the next stage. A gamified workout scheme could involve step-count competitions between friends, with a prize for the winner.
According to recent research into employers’ use of gamification, almost nine in ten say gamification makes them feel more productive at work. When gamified training programs were compared with non-gamified alternatives, 83% of people who had undergone the gamified training felt motivated, whereas some 61% of their counterparts on the non-gamified track felt bored or unproductive.
The principle of gamification is enshrined in BJ Fogg’s Behavior Model. Fogg’s model dictates that behavioral change is the product of three factors: people must be prompted to do something (the trigger); their motivation must be high; and their ability to complete the task must be straightforward, requiring minimal effort. The more each of these three variables is satisfied, the more likely people are to make a lasting change to their behavior.
Let’s put Fogg’s model in a practical context — keeping fit. Triggers aren’t lacking in today’s popular culture, with commercials marketing health products and exercise accessories commonplace across all media. And most people are motivated to try to keep fit thanks to a combination of health, aesthetics and self-esteem. Still, people stumble because they perceive keeping fit as something that requires inordinate effort: spending two hours at the gym every day or rigidly sticking to a monotonous diet. But if fitness were broken down into small, easy components, with progress after completing each new step, the big goal of ‘keeping fit’ would seem much more accessible, and people would be more likely to make lasting behavioral change. Running schemes like Couch to 5K have seen huge success in this way.
Games are so popular because people feel like they have control of their own destiny. When people see tangible rewards for behavioral change — that’s gamification in action, and it can help them make fundamental changes to their lifestyle.
The role of gamification in life insurance
Another reason games resonate is that they offer an outlet for people to express their creativity — as opposed to ‘boring’ activities like writing reports at work or filing tax returns. Unfortunately, life insurance fits into the category of products or experiences which people tend to consider boring. Deloitte research suggests that 31% of life insurance policyholders let their policies lapse, a finding that lays bare how many insurers are failing to engage customers on an ongoing basis.