Insurers customize products and services to sync with consumers’ life events

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Big data analytics and artificial intelligence (AI) allow insurers to make more informed decisions based on customer data feeds from third-party data sources such as social media, website click streams, and wearables or other connected devices.

Despite Americans being underinsured—and recognizing it—when it comes to life insurance, the industry has been trudging through a prolonged period of anemic premium growth. Real growth slowed to 0.5% in 2017, a decline of 0.9 percentage points as compared with 2016.[1] Pressured to improve premiums and profits, life insurers are looking to maximize value from existing customers while exploring new ways to expand their client base.

Today, some carriers are starting to mine extreme volumes and varieties of data, and our Top-10 Technology Trends in Life Insurance: 2019 explains how insurers are leveraging customer life-stage data to promote relevant products at appropriate times.

Proactive offerings based on customer life events

Big data analytics and artificial intelligence (AI) allow insurers to make more informed decisions based on customer data feeds from third-party data sources such as social media, website click streams, and wearables or other connected devices.

Some—typically larger—insurers are tapping into data lakes and big data solutions, and through analysis are reaching out to customers with personalized value propositions based on their life events. A proactive offering based on a customer’s life event is more likely to generate a sale because policyholders are receptive to coverage modification based on their new, emerging requirements.

One example of how carriers are improving customer engagement is Philadelphia-based startup Life.io, a customer engagement and data analytics solution that bridges the gap between life insurers and policyholders. Life.io’s digital-engagement platform ENGAGE helps customers set and achieve life goals in health (leveraging wearables), finances, and lifestyle. Life insurers can use the platform to offer a personalized policyholder journey that increases engagement and delivers daily value to customers. ENGAGE helps carriers build loyalty and gather actionable insights so they can understand and meet customer needs better.[2]

After a life insurance policy is sold, life-stage personalization throughout the contract enables customers to pay only for what they need. For example, InsurTech firm Ladder allows customers to personalize their policies even after purchase and during the course of the policy’s lifetime. Leveraging AI algorithms that deliver an initial quote matching a prospect’s profile and needs within seconds, Ladder allows customers to digitally update their insurance coverage to suit their latest life-stage needs. For instance, a customer who is a new homebuyer can quickly upgrade their coverage online while an individual who has paid off their mortgage can also conveniently switch coverage options to match their new situation.[3]

Benefits of life-stage offerings

Insurers are generating better mind/wallet share with customers by providing the right services and offerings at the right time – not simply serving policyholders but delighting them.

Enhanced customer experience is bound to improve policyholder retention. In an environment of intense price competition, life insurers can utilize value-added services to not only differentiate from their competitors but also to create new revenue streams.

There is no doubt that providing proactive and personalized offerings will become more and more important to insurers. The World Insurance Report 2018 found that customers are not only willing to receive proactive, personalized offerings but they reported a 15.7 percentage point higher positive experience when they perceived their insurers to be proactive.

As insurers strive for right-time right-place positioning in their customers’ lives, building capabilities in real-time data capture and analytics that enable fast insights will be critical.

To have a discussion on the topic, feel free to get in touch with me on social media

[1] Swiss Re, “sigma NO 3/2018: WORLD INSURANCE IN 2017: SOLID, BUT MATURE LIFE MARKETS WEIGH ON GROWTH,” https://www.swissre.com/institute/research/sigma-research/sigma-2018-03.html, accessed January 2019.

[2] Life.io website, http://life.io, Accessed December 2018

[3] Ladder Life website, https://www.ladderlife.com, Accessed December 2018

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