If the digital age has delivered customers anything, then it is the ability to personalise virtually any product or service to meet their unique needs.
Financial services providers, like insurers, must capitalise on this to satisfy individual customer requirements and differentiate themselves in the process, says Leonel da Silva, portfolio manager at SilverBridge.
“It has become too easy to throw terms like digital transformation and disruption into business and think it will overcome all organisational challenges. And while personalisation and customisation are vital parts of the innovation needed in insurance, solid business principles still need to apply,” he says.
The temptation to embrace any technological innovation to the detriment of more traditional options have become part of business as usual. Instead, decision-makers need to examine what the business case for that innovation is and whether there is a logical fit inside the organisation to do so.
Be different
This is where personalisation for insurers come in.
“Customers want to feel empowered and masters of their own destiny when it comes to selecting the products and services that align to their needs. Insurance, for its part, is an industry that has a natural allowance to do so. After all, no two customers want to insure the same things or have the same household items or vehicles that can be neatly pigeonholed into a specific product offering.”
Sadly, many incumbents have done just that – offered people an ‘off-the-shelf’ insurance product in which all their needs must be met. And while they have been doing so successfully for many decades, the rise of more agile insurtechs are forcing a rethink to this old school approach.
Under pressure
These insurtechs do not have to rely on cumbersome legacy systems to deliver solutions to their customers. Instead, they capitalise on the flexibility digital innovation provides them and deliver a niche service offering (for the time being) that is designed for very specific customer needs.
“This personalisation is more than just a targeted email or SMS message wishing a customer a happy birthday. It is integrated into all aspects of data capturing, analysis, and insights to deliver a complete view of a person. Being able to put the pieces of the data puzzle effectively together and pro-actively address customer expectations will result in someone potentially leaving the insurer to a person loyal to it – an incredibly valuable proposition today.”
Just because insurtechs are more adapt at doing this, does not mean incumbents are unable to. In fact, the wealth of customer data they have at their disposal puts them in a much stronger position than the ‘young upstarts’. There just needs to be a willingness to use this data in a more integrated fashion.
“Today, it is about using data in real-time and moving away from the siloed approach of the past. It is all about innovating quickly, learning from mistakes fast, and adapting solutions accordingly. To do any less, will result in a negative customer experience. Now is the time for insurers to act and leverage their data to become significantly more competitive,” he concludes.