How Insurers Can Use Customer Data To Their Advantage

customer data and insurance

Offering service with individual value is a goal for most insurance agencies and their brokers, but in modern times this is becoming increasingly difficult with a digitally dexterous client base.

McKinsey found that people looking for insurance now bounce between multiple channels.

“Today they increasingly expect to interact with their insurance provider on their own schedules, at all times and through multiple channels (e.g., phone, online self-service, click-to-chat).

Furthermore, customers expect a consistent, satisfying experience at every interaction. As a result, the walls between traditional distribution channels are crumbling.”

Falling walls shouldn’t be seen as a scary prospect, by lowering boundaries between data pools there is the opportunity for insurance brokers to have a more complete view of customer interactions and interests across multiple touchpoints. This kind of visibility can aid them in creating specialised models that are tailored to each client.  

How can they do this?

By making customers the centre of their data strategy

Being agile is vital in the current ecosystem. Insurers can manage new customer expectations by using data to create more precise risk assessments, reduce churn and strengthen broker- carrier relationships.

Assessing Risk

With the internet of things (IoT) customer data can be determined through connected devices. In the case of automotive insurers, connected sensors on vehicles can give a clearer picture of exactly what occurred during an incident and judge based on a precise individual experience.

Reduce Churn

Using data to reduce churn means implementing technology to make use of each customer’s journey. Predicting behaviour is the secret to determining churn and lowering the rates. This can be done with the right analytics.

Broker relationships

Brokers should be the experts of the service offered by insurance carriers, but with more data on the table, their jobs will change from being universally informed to specialising in specific fields. Carriers and agencies can strengthen their relationships with brokers by including their expertise in how they collect and segment data in their strategy.

Learn more about our insurance solutions here.

A Brief Look At Customer Loyalty In The Insurance Industry

customer loyalty

Interacting with customers and maintaining their loyalty is something insurance companies are battling in our age of big data, how can they achieve this? According to Accenture, “first movers with strong brands and customer bases can gain a sustainable competitive advantage by influencing the composition of the ecosystem within which they operate.”

Influencing this ecosystem means adapting to the needs of modern customers and maintaining transparent partnerships with affiliates like aggregator/comparison websites, which can cause insurance companies to be one step removed from their base.

Generic search has changed how customers find companies and the aggregator business has taken advantage of this shift in expectation, in the UK it accounts for 70% of the premium income, says Friss. For most searchers, choosing the right provider is almost always influenced by price and aggregators shape their business models around this insight. Direct insurers struggle in this new environment due to bad branding and less emphasis on customer recognition, offerings that usually attract consumers to comparison websites.

There are so many companies now that don’t really have a brand that can get business from price comparison websites, what you end up with is this disenfranchisement from consumers,” says Consumer Intelligence CEO Ian Hughes.

A lack of branding mostly occurs outside the United States, where insurance brand names are synonymous with creative advertising – Geico has a Gecko, Progressive has Flo.

flo progressive
Flo from Progressive Insurance advertising

“The goal is to create engagement,” Matt Johnson, State Farm’s former head of digital marketing told Contently. “You are battling for a share of the mind of this human being. For something like insurance, these people don’t know that they’re going to [need it]. So when that happens, they’re going to research two or three companies. We need to be top of mind.”

On the other side of the Atlantic, both aggregator websites and insurance brands consider every customer as their possession, yet have very different needs. Aggregators focus on lower costs while insurers require retention and loyalty but don’t quite know how to go about it.

The lack of communication and consistency between brand and affiliate is directly affecting the overall customer experience negatively, especially when its time for renewals. Cooperation between the two is necessary to change the landscape.

Working together

It’s down to creating a symbiotic relationship among customer-aggregator-insurance brand. “A hybrid distribution model that combines online and mobile channels with agent/call centre/ chat support, therefore, continues to have high potential,” notes Accenture.

Doing this means learning from aggregator’s customer-centric strengths such as easier form fills (tick boxes instead of text boxes). Insurers use text boxes 28% more than aggregators which can lead to more errors.

Restructuring the form process for direct insurers involves finding new ways to stay connected to customers even after they’ve closed the deal. Stats show that 20% of customers are leaving their carrier after just a year.

Building loyalty is aligned with creating a holistic view of an insurance hunter, and offering them more than just a singular product, “customers are ready and willing to hear from their insurers about services that reach beyond core insurance,” says Bain & Company. Products attached to policies such as security, car check-ups and more can increase touch and ensure brands aren’t speaking to their customers only once a year.

Direct insurers need aggregators and vice versa, paying attention to the contributions of both can bring them closer to their common goal, customer satisfaction.

Learn more about closing the gaps in customer service here. 


Via: Accenture, Friss, Consumer Intelligence, Bain & Company, Contently.