Figure 2: Deep customer engagement drives customer lifetime value.
Auxiliary ecosystem data enables hyper-personalization
Insurers are also creating networks of connected products over and above their traditional insurance product offerings to support customer journeys across different life-stages. For instance, auto Insurers now offer support ecosystems for everything from accident assistance and repairs to temporary replacement vehicles. In these ecosystems, customer behavior is tracked to provide customers with the most relevant products and services to supplement their insurance coverage. By offering more comprehensive support for drivers, these data-driven ecosystems also promote policy renewals and successful cross-selling. Similarly, global life insurance groups are investing in wellness ecosystems aimed at improving customers’ health outcomes. These networks enable life insurance companies to gather data and feedback on the customer experience, then use those insights to create hyper-personalized products, communications, and services that benefit both the customers and the business.
New-age digital insurers or sub-brands have the advantage of speed and agility
Unlike new-age digital insurers, traditional insurers with legacy systems typically find it difficult to embark on hyper-personalization journeys. Upgrading legacy systems can help established insurers increase agility and personalize services. As-a-service models, including software as a service (SaaS) and platform as a service (PaaS), can also help large insurers achieve hyper-personalization. SaaS and PaaS are cost-efficient alternatives that enable speed and flexibility.
Some insurers are even creating new sub-brands to carve out hyper-personalized policies for millennials and Gen Z customers. A large Australian financial services provider created a separate cool sub-brand to offer hyper-personalized products to younger customers. This provider also adopted a PaaS model to power this journey, moving away from legacy systems.
Hyper-personalization is becoming a core component of the digital experience
In effort to enable hyper-personalization, organizations are adopting practices that prioritize customer-centric models, drive product innovation, and promote better practices across the value chain.
The success of and ROI on hyper-personalization are a function of the insurer’s digital initiatives across the value chain —leveraging capabilities such as AI, automation, machine learning; building a data ecosystem that elevates customer experiences. These technology enablers can help insurers better identify, engage with, and understand new and existing customer. To extract the most value from this approach, insurers need to employ dynamic growth strategies, and execute them with the help of third-party IT partners in the near future.