Getting smart about how we leverage data and analytics can help match customers with the right products and build trust along the way.
90% of insurance companies say they struggle to get value out of data and analytics, so how do you unlock the opportunity? That was the question put to Ned Lowe, CTO, Singlife and Daniel Thafvelin, executive director, Global SaaS, Contemi Solutions during an Insuretech Connect Asia panel discussion: Closing the digital gap.
Two things are necessary, according to Thafvelin: Having the right people and integrating data and insights into the underwriting and placement process.
While many carriers have access to abundant data, they lack the right people - the data scientists - who can really understand the analytics and how they can be used to better engage customers, tailor products to individuals and innovate to provide new products and services.
"80% of customers expect you personalise their offering - that you use the data you have on them to give them offerings that fit their situation," he said. "It's not just an opportunity for insurers, it is also something expected by the clients."
"You need to have the data integrated into your process and at the fingertips of the people who need to apply this information."
This could be agents or intermediaries dealing with a particular customer and using a dashboard to find the right solutions for their particular needs, or it could an analytics team taking a more holistic view and using insights to segment across their customer base.
It is also important to offer customers an omni-channel service, so that you can align with your customers' needs, thought Thafvelin.
Waking-up to the value
The fact so few insurers feel they are generating value from their data and analytics is a reminder of how early in the journey we are, and that many insurance carriers have not yet understood the potential, thought Lowe.
With the right applications, the opportunities for lead generation and matching are significant, he said. This will ultimately bring down the cost of customer acquisition.
"If I can truly understand my customer base and their wants, needs, demographic, salary and lifestyle - and then match the two sides together - the chance someone is going to get the advice that most resonates with them is much higher."
"So by gathering as much data as you can, using relatively well-understood segmentation models, it can raise conversion rates significantly."
Leveraging customer data in the right way can also help build loyalty, improving retention rates and enabling cross-selling.
Data analytics and machine learning can also help match up customers to the right product without "pushing the complexity onto the customer", he explained.
"In many cases a simple product it going to be more expensive for term life or health because by simplifying it you've made it cover a broader range of risk. The complexities of products is a way of trying to fit the product to the customer and get the best price."
"But this process relies on the customer trusting the insurer that it is the best product for them," he added. "Then it is about building engagement and trust."
The problem for many customers is they do not want to interact with their insurance company, explained Thafvelin. Insurance is a product for a rainy day, for when the worst happens and a claim has to be made. This is something that carriers need to overcome in innovative ways.
Generating more interaction could be as simple as adding a free Netflix account to your home insurance. By logging into a multimedia platform via your insurance app, customers will see regular updates and products they may want.
It increases the number of touch points an insurer has with its customer throughout the year, and also provides an opportunity to offer helpful risk advice, such as sending a reminder to put new batteries in your smoke alarm.
"From the carrier side, they know the house has working smoke detectors and therefore that it's a lower risk," concluded Thafvelin. "Customise the offering for the client to build up loyalty, which ensures the client stays with you for longer and it lowers your risk."