Advanced analytics enable insurers to predict customer needs and personalize services

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Insurers who make the most of advanced analytics to improve customer engagement can realize their customer-centricity ambitions.

Insurers across industries have adopted a customer-centricity mantra as business pace quickens and becomes more competitively dynamic. To sustain margins and to thrive in the medium  to long term, firms are working to understand customer needs better and to offer tailored products built around customer requirements.

Today’s stakes are high as increasingly-connected customers base the excellence benchmarks on their personalized and predictive interactions with BigTechs during everyday tasks such as ordering a smartwatch online, mobile grocery shopping, or selecting which Netflix programs to binge watch.

Advanced analytics level the playing field

Advanced analytics tools enable insurers to collect a wealth of data about customer behavior and preferences from connected devices such as smart home sensors, telematics, and wearables. They can use this data to gain a deeper understanding of individual customers while keeping real-time tabs on customers to proactively help prevent risks. Advanced analytics can empower insurers to predict and meet customer needs in a variety of areas.

Targeted marketing

Based on customer data from unstructured sources such as social media, insurers can leverage advanced analytics tools to identify and promote products that are uniquely suited to a customer’s life events. Personalized offerings encourage customer delight and enhance sales conversion because the product accurately meets the customer’s need.

US-based InsurTech Life.io offers a customer engagement tool that helps life insurance carriers build better customer relationships while gaining more in-depth knowledge about their customer base through life events, health goals, and financial goals tracked through a white-label platform. It offers insight into policyholder behavior so that carriers can proactively reach out based on life events.

Personalized product design using AI

Insurers can leverage AI and advanced analytics to design personalized products based on customer needs and risk gaps. InsurTech Digital Fineprint, which works with insurers such as MetLife and Allianz, provides a SaaS platform insurance intelligence solution that uses data analytics and AI to identify the risks faced by SME business owners and help insurers design products and solutions to cover those risks.

Risk mitigation and value-added services

As insurers transform their customer relationships from risk financers to risk partners, advanced analytics enables real-time monitoring of customer risk as well as timely intervention to prevent or mitigate adverse incidents. Swedish insurer Folksam leveraged the platform of prevention-as-a-service startup Hiotlabs to measure humidity and temperature data for early detection of residential water damage. By applying machine learning algorithms on humidity and temperature sensor data, the platform detects trends and sends a push notification when a leak is imminent.

More insurers are working to anticipate their customers’ need for damage control and are taking proactive steps to mitigate or prevent damage.

On-demand insurance

Another model that helps firms to anticipate customer needs and provide timely service is on-demand insurance. InsurTech firms Sure and Trov provide on-demand protection in different contexts, allowing customers the flexibility to switch coverage as they need it. Insurers can enhance on-demand protection further by anticipating customer needs through geolocation features and providing well-timed notifications about relevant offerings or by designing customized services.

For example, notification for travel insurance can be pushed to a customer as they enter an airport. Similarly, an auto insurance upgrade might be suggested as a policyholder drives through rough terrain.

Predicting emerging risks

More broadly, advanced analytics can be used to identify emerging risks faced by customers as a whole, so insurers can proactively design offerings that address potential new risk scenarios.

The advent of the sharing economy – in which peer-to-peer sharing of goods and services is facilitated through an online platform – opened gaps that insurers can now address with the help of advanced data capabilities.

New York-based InsurTech Slice offers on-demand, pay-per-use insurance so that homeshare hosts don’t have to rely on Airbnb or similar companies for protection. Slice coverage protects against theft, vandalism, water damage and more for customers who open their homes to outsiders.

The power of technology to predictively meet customer needs is a transformational tool, particularly considering today’s customer expectations for proactive, personalized insurance products.

Not surprisingly, customers who perceived their insurers to be proactive had an almost 16 percentage point higher positive experience than customers who did not believe their insurers were proactive, according to Capgemini’s World Insurance Report 2018. Moreover, nearly 40% of Gen Y – and around 45% of tech-savvy customers – said they are willing to share their data with their insurer if it meant receiving more personalized services.

What does it all mean? Insurers who make the most of advanced analytics to improve customer engagement can realize their customer-centricity ambitions.

To learn more, feel free to get in touch with me on social media.

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