At present, businesses are operating in a highly competitive environment and digital interaction is becoming a norm across the world. Several new ways have been developed to share information and communicate, which has led to huge growth in the volume of data being generated every day. New tools to analyze these data have also been build, through which insurers can tap into the data and leverage its power to generate useful insights. Once the insurers generate insight, they become aware of their customer needs and preferences, and this further helps in providing them personalized and real-time service, with flexible product offerings.
Thus, insights-driven Insurance helps insurers to generate new opportunities and drives the business towards growth.
Embracing the new age of Insurance
As the world is moving towards becoming more digitalized every day, digital customers’ expectations are getting higher. The insurance industry was earlier seen as a paper-based industry, but as the world progresses towards becoming digitalized, there are new opportunities for the insurers to focus on in order to acquire and serve new customers.
IoT devices and insight generation: International Data Corp estimates that “there will be 41.6 billion IoT devices around the world by 2025”. This rapid spread of IoT devices makes information sharing easy and also generates huge volumes of data. IoT devices help insurers by providing them the information about their customers, for example, in-car sensors can send insurers data related to driving habits/ product usage which may further help the insurers to provide their customer’s customized services as they already know pieces of information about them.
Customer Preferences and buying behavior:
The digital generation is typically between 20-36 years old and they expect rapid access to information and in order to maintain customer loyalty it is required to provide proactive service. New data sources and analytical capabilities can provide instant in-depth insights of risks across touchpoints, which facilitates quicker risk assessment and allows insurers to propose innovative and relevant coverage.
Multiple Touchpoints: There are multiple touchpoints through which insurers can interact with their customers and provoke recall. Customers today in order to fulfill their information needs switch to various touchpoints, so, it is required that insurers access insights across all the different types of touchpoints. The various types of touchpoints are:
⦁ Owned touchpoints: This type includes agents, websites, apps, etc. Insurers can invest in these touchpoints for long-term relationship-building with their consumers. The benefits include cost efficiency and control.
⦁ Paid touchpoints: This type includes paid searches and sponsorships. Insurers pay for these touchpoints to reach their digital customers. Paid touchpoints also include Bancassurance, where, insurance companies sell their products to the bank’s client base.
⦁ Earned touchpoints: In this type, the customer is a touchpoint, as when a customer is highly satisfied and spreads awareness and influences others.
⦁ Social touchpoints: When an insurer creates their profile on various social media websites such as Facebook or Instagram to influence their customers or sell their products, they leverage the power of social touchpoints.
Benefits of Insights-Driven Insurance
Helps in Decision-Making: Data Analytics and reporting can help identify potential problems and take the necessary decisions to get rid of unwanted processes and implement the proper strategies based on the evidence provided by data insights to see which areas are error-prone and need improvement. For example, if insurers combine traffic, weather patterns and other factors, they may determine which driver spends the majority of time on higher-risk roads and which driver spends less time on these roads. Further, these insights can be used to propose relevant coverage to all the type of drivers, thus, helping insurers in decision making.
Improvements in Customer Acquisition, Retention, and Experience: According to a study conducted by Forrester Consulting, “64 % of marketers believe that customer acquisition and retention are necessary for a healthy and successful business”. A positive customer experience is the need of the hour, without which all the strategies are limited to no use. Data enhances the ability of insurers to track the prospect’s purchase history, social media behavior, etc. Using Insight-driven insurance, the insurers can better capture the expectations of the customers and also enhance their experience.
Access risk insights across touchpoints: Insurers can obtain risk-related insights by analyzing the data from a variety of touchpoints and can identify new risk exposures as well as monitor the existing ones. Pre-digital, insurers use to wait for loss data in order to assess if a customer is adequately covered, but thanks to new analytical capabilities that now insurers can quickly do the risk assessment as they have an in-depth view of risks across touchpoints.
More timely Feedback loops: The feedback which earlier was received through post and used to take a long time, today because of digitalization insurers receives more timely feedback and this enables insurers to analyze a range of daily interactions and generate insights on how to improve their offerings.
To conclude, Insights-driven insurance can help insurers to improve their business on many levels such as offering relevant and innovative coverage, identifying new risk exposures, improving the customer experience and many more. Thus, employing Insights-driven strategies can help an insurance company achieve a competitive edge over its competitors.
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