By Riaan Bekker, Force Solutions Manager at thryve
Personalisation is establishing itself as the cornerstone of modern insurance and insurtech. The trend has been building momentum for several years, and today it’s evident in the advertisements of numerous insurance products.
Policyholders can reduce their costs through fitness trackers or monitoring their driving behaviour. Both are explicit examples of how insurers are using IoT (Internet of Things) technologies to improve their services, as well as tailor their products. But the scope of personalisation is much broader.
PWC and several others’ recent reports on insurance’s future, highlight personalisation as a defining trend for the next year. Deloitte puts it best: “Customers are the disruptive force in the insurance industry. In an age of immediacy, constant change and overwhelming choice where loyalty is no longer a given, the industry has to extend beyond its core products and services if it is to retain its customer base.”
Personalisation takes on several forms:
- Policies tailored to a customer’s needs.
- Engaged and knowledgeable staff.
- Multi-channel engagement
- Product and payment flexibility
How does each impact South Africa insurers in the next year and what can they do? Let’s explore these in more detail.
Insurers have been using policy tailoring as a sales method for several years. As mentioned above, this is manifesting visibly with IoT-related features, such as tracking driving or health. Beam, a U.S. dental-insurance startup, offers connected toothbrushes to its customers, tracking their use for better premiums.
But tailoring policies will become a more extensive practice, especially as customers move closer to underwriters and buy directly. It will be prudent for brokers to offer personalisation services and align with underwriters that can facilitate that. This is true for both individual sales and bulk purchases. PWC anticipates that customers grouping together for bulk-buy discounts will be a significant trend:
“45% [of underwriters] expect ‘distribution destruction’ where customers buy direct and even form groups to negotiate bulk purchases direct.”
Engaged and knowledgeable staff
A view that resonates across all the reports is that customers expect a lot more personal attention from insurers. The perks that come with tailored policies, such as heavily-discounted fitness watches, are big draws. But by far, the most crucial element is for staff to be engaging and knowledgeable.
Companies must do two things: hire good people and put the right information at their disposal. The second requirement is met through 360-degree customer profiles. Although a well-known phrase, many companies have not sufficiently integrated customer information and made it dynamic for this purpose. Doing so requires a technology platform that is agile and connected to the various information sources that define a customer profile.
Finding good people to manage those relationships is just as key. Here, the technology pedigree of the company matters as well, Board of Innovation declared:
“Younger candidates, in particular, are showing little desire to venture into insurance over other, more ‘exciting’ industries, such as those in the tech space.”
There is a clear expectation from customers to have multiple channels of engagement available to them. They want access to different touchpoints, but want the experiences to be seamless. 360-degree customer profiles are crucial for this, so as to easily hop from a website to a mobile app to a chatbot to a consultant.
Personalisation also requires multi-channel presences. Channels aren’t just sales-orientated: the dashboards that customers use to measure their performance or policy nuances are other examples of this trend. Channels are about creating experiences, for sales, after-sales service and other value-adds. According to Accenture:
“A multi-channel distribution capability is essential, not necessarily for selling, but for enabling convenient communication and the provision of a rich customer experience.”
Product and payment flexibility
Insurance works at scale. You balance the risks of customers by the reward of managing their premiums. This approach worked best when you pool the risk across a large customer base, which kept products reasonably generic. As the above trends make clear, that’s changing and insurers will do well to adopt even more flexibility in their products and services.
There is the opportunity for more short-term insurance, reinsurance and micro-insurance products, as well as new models such as peer-to-peer insurance. For insurers in South Africa and other developing markets, flexibility also means appealing to cash-strapped customers. For example, micropayments can incentivise customers to drive better or take their chronic medication. But it will be even more crucial to offer flexible payment systems. KPMG stated:
“More than 60 percent of citizens operate in the informal sector, with considerable pressure on their income. Products that offer break periods or the ability to postpone payment without the policy being cancelled might be features that would prove appealing to such a population.”
I firmly see personalisation as the dominant force that will shape insurance in 2020. This trend is already manifesting, but it’s only the beginning of what’s possible.
Driving this change is insurtech, the technologies that are rapidly digitising insurance operations. We use insurtech platforms and technologies such as Salesforce Financial Services Cloud for Insurance and Riskonnect to create thryve’s solutions, so I’ve been able to witness these transformations first-hand. It’s amazing what an insurer accomplished once it uses a unifying platform that is integrated and balanced with its various departments, processes and people.
Technology is the key to unlock personalisation. The right solutions can be introduced as a pilot, scaled into specific areas of the business and continually enhanced to cover different business requirements. All the above trends use technology platforms – none would be possible without a platform that integrates multiple information sources and offers secure management portals for staff and customers alike.
We published several articles on thryve’s blogs to explore the relationship between insurance and digital modernisation. 2020 will see many ramp up their efforts, so learn more and make sure personalisation is part of your strategy.