Overview
A case study by McKinsey predicted 5-15% increase in revenue and 10-30% increase in marketing-spend efficiency through personalized product recommendations. Another study reported that 78% of insurance executives believe personalized service based on real-time data analytics will be a crucial differentiator in the industry.
These numbers are driven by the two trends that characterize today’s consumers – personalized services and instant gratification. Every customer is unique and expects service providers to understand and cater to their specific needs. They will prefer service providers who resolve issues and settle claims within hours. Insurers will benefit from developing attention to detail and taking actions based on predictive insights.
Let’s explore why insurance companies globally must shift gears, and the technologies that will give them the greatest thrust.
Logical to be Technological – The need for personalization
Insurance is making a paradigm shift from ‘indemnity’ to ‘well-being’. Buying an insurance policy is a long process, during which people compare the track record of companies and gauge the additional benefits, time taken to settle claims and quality of communications. Once they start their journey with an insurer, they expect a long-term and positive relation.
Making the best efforts possible to create personalized experiences for end users, along with end-to-end digital journeys, is a logical necessity for insurance companies. Here are factors that support this deduction:
- Competition is increasing for insurers as regulations ease and markets open up
- Digital awareness and demand for omnichannel experiences is rising, and insurers can’t shy away from technology
- Quality and speed of service are gaining relevance as critical differentiators
- Customers are becoming more aware of options, and making informed decisions based on overall service effectiveness
Customer-centricity and Beyond
Insurance customers not only buy immediate risk coverage, rather they look for value across their journey. Hence, insurers must adopt technologies and create strategies that boost the value delivered throughout the customer lifetime.
GenAI can prove to be the perfect genie and change not just the way solutions and services are developed, but also how companies interact with customers. As stated in an August 2023 BCG interview, tools such as GenAI-powered sentiment analyzers have the potential to greatly enhance customer service, and 40% to 60% savings are expected from productivity gains in customer service.
By adopting AI-led innovation, insurers can achieve more with their efforts for customer value marketing as well as responsive customer servicing. While smarter chatbots, sentiment analysis and real-time claim tracking can rejuvenate the reactive strategies, customer loyalty programs and triggers can help insurers become more proactive. Personalized journeys can be delivered through:
- Data-driven customized offers
- Hyper-personalized campaigns
- Insights-powered outreach for deeper understanding
- Consistent omnichannel experience
- Contextual, empathetic response with natural language processing
- Interactive communications to nudge response
Personalization based on Moments of Truth
Life journeys are woven with moments of truth or events that deeply impact a customer. Marriage, additions to the family, retirement, buying a property or accidents are some decisive moments that offer an opportunity to insurers to make a lasting impact and derive value. The quality of service offered can determine whether a customer stays or makes a switch.
Insurers can deliver value-added solutions, services and communications based on the extensive customer data by leveraging GenAI. Here’s the process that leads to personalized campaigns and proactive communications:
