As an insurer, you know the importance of delivering data-driven personalization to your stakeholders. Because it is such a critical differentiator in a very crowded industry, it seems that organizations are willing to throw various “solutions” at the wall to see what sticks. This isn’t the way.
Understand that every user has different needs and expectations — consumers, claims adjusters, agents, and underwriters — so how and where they receive information varies. This requires a level of personalization that’s adaptable, fast, and always up to date. There are numerous options available today, but finding one that meets these standards and delivers true personalized experiences is not always easy.
What is Personalized Insurance & Why Is It Important?
A McKinsey & Company report states that “personalization is the future of insurance marketing.” This same report defines personalized insurance as reaching customers with targeted messaging, offers, and pricing at just the right time. The key to creating communication and products that are tailored to individual preferences and behavior is … data.
Data-driven personalization leverages data to tailor experiences and decisions for all users involved in the insurance value chain. Insurers can use data to guide internal processes and enhance external relationships, leading to efficient operations and delightful customer experiences. Together, these improvements result in better insurance for all.
Insurance operations have always relied on data, and in today’s digitized insurance market, collecting, categorizing, and analyzing data is easier and more useful than ever. Digital insurance tools and technology — like the Internet of Things (IoT), artificial intelligence, machine learning, and data analytics — not only help improve underwriting practices and detect fraud, but also help insurers deliver truly personal experiences.
Why is this important? For a few reasons:
- Customers expect personalized treatment. An Accenture survey found that 80% of insurance customers are looking for personalized offers, messages, pricing, and recommendations from their auto, home, or life insurance providers.
- Personalization will set you apart. Despite the endless reports and data that highlight the value of personalized service in insurance, many organizations are not adopting it fast enough. A Youbiquity Finance report stated that 21% of customers say their insurance providers do not offer any customization.
- Personalized insurance can increase revenues. Regardless of industry, brands that create personalized experiences by integrating advanced digital technologies and proprietary data for customers are seeing revenue increase by 6% to 10%, according to Boston Consulting Group research — two to three times faster than those that don’t.
Benefits of Personalized Insurance
Depending on the insurance technology you have in place, there are differing levels of personalization you can deliver.
- Personalization based on demographics
- Segmentation based on individual behaviors
- Personalized insurance based on individual behavior
- Real-time, data-driven personalization that leverages connected customer interactions
Obviously, the insights you can gain in real time during a customer interaction will be the most accurate and beneficial, but any enhanced level of personalization will benefit both the insurer and the customer.
The primary benefits of personalized insurance are:
- Streamlining operations and working more accurately with customers. Having a robust customer profile beyond just demographics — think data generated from fitness trackers or social media activity — can help improve service to your customers. Insurers who have a 360-degree view of their customers can deliver faster, more accurate service based on their high level of insight into customers and their needs.
- Driving more effective sales. Personalized insurance can have a twofold benefit on sales initiatives. First, many customers are willing to sign up for plans that ask them to share more of their data in exchange for lower premiums — offering this unique service opens up another avenue to potential customers. Second, having greater insight into customer behavior and preferences can improve targeted marketing and sales initiatives. You can now more accurately offer the services people want and develop the products they need.
- Improving customer engagement/satisfaction. No one wants to feel like just another number, and with personalized insurance and service, customers feel more valued and appreciated.
- Making leveraging data easier. With personalized insurance capabilities and their corresponding data analysis tools, you can easily access self-service reports and dashboards that answer common operational or management questions and provide insights to your executives, underwriters, and claims handlers.
How to Develop a Personalized Insurance Offering
Integrate technology and data solutions. You can’t leverage data until you have a way to collect it and analyze it, and that starts with digital insurance solutions. Whether you want to start slow and implement just a digital claims solution or you’re looking to completely upgrade to a cloud-based platform, you must have a solid technology infrastructure to even consider enhancing your personalized offerings.
Learn your customers’ needs and preferences. Your data is only as good as the insights you gain from it, so you must have a comprehensive analytics solution. A high-quality analytics program will enable you to make data your most valuable asset – one that empowers you to make more accurate decisions, improve product development, and ultimately personalize service to the delight of your customers.
Ensure a cross-channel personalized experience. Because personalized insurance relies heavily on data collected from IoT devices and other tech, it’s imperative that the customer experience is seamless across these different touchpoints. Whether they’re interacting with you on a mobile app, live-chat feature, or over the phone, insureds should experience the same level of personalization regardless of the touchpoint.
Provide personalized interactions and responses in real time. We know customer expectations are high, and that is certainly the case when it comes to communication. Not only do you need to respond to questions, concerns, or comments within an appropriate time period, you need to do so with a tailored approach. According to HubSpot, 80% of customers expect businesses to respond to their posts within 24 hours. Also, 79% of consumers prefer a live chat option over social media due to the quick response time and personal touch.
Focus on service — not selling. While selling a product or service is certainly important, it shouldn’t be the main focus. How important is it to provide a positive, seamless experience for consumers? According to HubSpot, “90% of Americans use customer service as a factor in deciding whether or not to do business with a company.” Also, good service often will lead to sales; “93% of customers are likely to make repeat purchases with companies that offer excellent customer service,” also according to HubSpot.
Duck Creek Personalized Insurance Use Cases
Cerity Services
With out-of-the-box solutions and open architecture from Duck Creek, Cerity was able to build a digital-first insurance company with a unique, customized user interface that offers industry-best speed and functionality – in near record time.
Goals
- Create differentiated user experiences while relying on off-the-shelf products
- Launch an entirely new startup insurance company as an offshoot of an incumbent from scratch in minimal time
- Industry-leading quoting and policy issuance speed
Challenges
- Aggressive schedule left little time to vet solutions
- Implementing and connecting disparate back-end systems while simultaneously building a complete business
- Creating workers’ compensation products has historically been time-consuming due to complex coding projects and strict regulations
Results
- Fully functional workers’ compensation business launched in 12 months thanks to Duck Creek’s out-of-the-box functionality and industry content templates
- Online portal can produce tailored quotes within seconds and deliver a policy in force in five minutes or less
- Cerity delivered a unique user experience via APIs without compromising functionality
Utica National Insurance Group
Duck Creek’s cloud-based insurance solutions equipped Utica National Insurance Group with the modern infrastructure they needed to deliver the speed to market and agile functionality required to compete in today’s industry.
Goals
- Develop a data operations framework that simplifies how data is collected, synthesized, and deployed to the organization
- Enhance business decision-making with access to granular information on customers, risks, and outcomes
- Create a single source of truth where all data sources can be consolidated and governed for accurate and complete analysis
Challenges
- Legacy data architectures didn’t meet established needs for speed to market, organizational agility, or ability to innovate
- Inability to deliver detailed data for business performance monitoring and analysis
- Processes like adding new data elements, parsing XML blobs, building star schemas, or data model planning were time-consuming and expensive
Results
- Replaced rigid data models with a cloud-based data architecture that is extensible, scalable, and flexible
- Expanding and updating the data models can be completed with minimal or no code writing, resulting in streamlined implementation projects
- New business analytics enabled a better understanding of Utica’s commercial book of business, improved renewal decisions, increased premium leakage prevention, and enabled more effective claims management
