How well do you know your clients? Probably not as well as you think. Certainly not as well as they’d like you to.
Dr Eugene Wessels, partner: data analytics at King Price Insurance
But that’s all changing. Clients aren’t just demanding greater levels of personalisation from their insurers: They’re willing to pay for it, in the form of cold, hard data.
Indeed, data is the modern insurer’s currency of choice, and it’s transforming the entire industry. It’s driving a trend of hyper-personalisation that’s going take ‘pay-as-you-use’ insurance all the way to ‘pay-as-you-live’ insurance, where you insure people and their stuff based on their risk at any given moment. In Paris for the day? Here’s your premium. In Parys? We need to talk.
This shouldn’t be a surprise to anyone. We’ve been watching the emergence of the super-connected, super-demanding consumer for several years now. Look at customer service, for example.
People just don’t like to wait in queues, or stay on hold. It’s the omnichannel promise, where your customers engage with you however they feel like, whenever it suits them. And when they get through to you, they expect you to know who they are and what their preferences are.
You’re not just targeting a generation X-er, you’re targeting Eugene Wessels, who likes rugby, Bar-Ones and the latest gadgets.
Of course, delivering this level of personalisation demands a foundation of solid data insights. Not just your standard demographic data, either: to get the deeper customer view, insurers need to get to grips with behavioural insights as well.
And this is where artificial intelligence (AI) comes in, making sense of the tsunami of data that floods over us each day and creating the insights and tools that make extreme personalisation possible.
A great example of this is the way AI and bots are facilitating omnichannel interactions with clients. You don’t always need a human on the other end of the line if you can have a bot that can do the same job.
We’re already at the stage where bots can answer basic questions, like ‘where do I take my car for an assessment’ or ‘what’s my next premium going to be’.
Ultimately, what the financial services industry is working towards is building an intelligent ‘brain’ that can be used to ensure that the business deals with a customer in a consistent way.
This goes beyond how and when we interact with customers: it’s more about understanding what products we present to a customer, and how we best service them in a way that keeps their best interests at heart and guarantees a fantastic client experience.
But the real enabler of usage-based insurance is the world of autonomous assets – or the Internet of Things (IoT) – as it’s known. What this means is that if you can fit sensors to assets like cars, fridges, and geysers, they become aware of themselves, as it were, and can communicate their state at any time.
So, your geyser tells your insurance company that its thermostat is failing, and a plumber arrives at your house to fix it without you even knowing there was a problem, saving a potentially costly repair and clean-up.
Your car knows that it’s travelling at a certain speed, and being driven in a certain way. Once your insurer’s AI system takes that data, and overlays information about the environment and the space, assets become truly intelligent.
What does that mean? It means you get a different premium when you drive at 70km/h in the rain at 3am than you would driving at 120km/h on a clear, dry highway. It means you could ultimately insure yourself for a single trip, or only when your car is actually moving. It means that, in exchange for your data, your insurer can truly gauge your personal risk, and insure you based on your own health and behaviour.
That’s why I don’t understand people who don’t care about their data. You should. Ultimately, it’s all about managing your risk. By sharing data with your insurer, individuals are able to manage their own risk – which ultimately means lower premiums and a hyper-customised customer experience. Now that’s something to get excited about.