Personalized engagement in insurance: The importance of connecting with customer life events



Highlights:

  • Insurance customers have come to expect personalized engagement from their insurers, and those insurers who provide it are poised for growth.
  • Life events represent a prime opportunity to offer personalized products and services to insurance customers.
  • A cloud-based communications platform facilitates personalized engagement.

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One implication of the COVID-19 pandemic is that insurance companies have developed a more compassionate approach toward consumers. Insurers recognize the importance of personalized engagement in a market that has become competitive, and in a time when health is a top priority in society.

 

Why and how to customize engagement with insurance customers

The following is a look at why insurers have engaged people more by connecting with the life events of their customers, and steps you can take to customize.

Customers demand customized experiences

The biggest reason to personalize your insurance to each customer is that customers expect it. In the digital-driven analytics era, customers have become accustomed to companies tailoring solutions to meet their needs.

Accenture recently reported that 80 percent of insurance customers want personalization from providers. Specifically, customers want you to share exclusive offers, recommendations, and services based on the individual’s needs and circumstances.

Differentiate from a crowded field

The insurance industry is highly competitive. Since rates are often comparable among top providers, you must find other ways to separate from the pack. Effective personalization is one way to do so.

According to Youbiquity, 79 percent of consumers reported that their providers do offer some level of customization, while 21 percent indicated their providers do not. If you are among the minority of providers not personalizing your services, it is easy for customers to recognize the difference.

Bottom-line implications

The data is clear that profits are directly impacted by personalization as well. Boston Consulting Group recently reported that insurance companies achieve revenue growth of 6-10 percent when providing customized solutions.

The rate of revenue growth for such providers is two to three times faster than for peers that don’t personalize offerings.

Importance of life events

When consumers buy goods and services, their primary concern is whether a purchase improves their quality of life. Some products create positive life benefits, while others protect against negative life experiences. Insurance is primarily a “peace-of-mind” solution. Thus, it is used to safeguard against negative life events.

To know what types of insurance recommendations to make, you need to understand the life events that exist for each person. The following are examples of critical life events, which make insurance recommendations ideal:

  • Buying a Home: The majority of home buyers must get insurance to meet lender requirements. Insurers want to offer a quote as early in the home-buying process as possible.
  • Selling a Home: Someone selling a home is going to need somewhere else to live. Even if the person hasn’t started looking for a new place, he or she will at some point.
  • Getting a Driver’s License: New drivers are a key emerging market for insurers but can be stressful for parents. Targeting customers who have young people when they get a driver’s license is beneficial.
  • Buying a New Car: Buying a new car often leads to pricing insurance, so it offers a great opportunity to induce a switch with an opportunistic recommendation at the right time.
  • Getting Married: Some insurance products appeal to couples when they get married. Often, couples move to a new home together, which makes them a good target for home or rental insurance.
  • Changing Jobs: A job change presents a potential need for new health insurance.
  • Starting a Business: Entrepreneurs are a good target for a few insurance products. They may need individual health insurance, or to start a group plan if they have enough employees. Property protection, small-business insurance, or personal umbrella policies make sense as well.
  • Having Children: Someone having a child may consider new health plan options that offer family benefits. Life insurance is another product that makes sense for some people when they have children.

Behavioral data and machine learning

Knowing which life events matter is just one piece of the customization puzzle for insurance providers. Demographic data, such as age, gender, race, marital status, income, occupation, and education, has historically been critical to target marketing. However, behavioral data coupled with machine learning technology amplifies personalization opportunities.

Your key question, then, is, “How do we know when someone is moving… starting a business… getting married?” You may not, but analytics software primed with high-quality data does.

Here are a couple of example scenarios:

Example 1: Someone enters the following search queries into Google: 1) “How do I start a business” and 2) “Commercial properties available in downtown (City X)”. Or perhaps, even more concretely, the person enters, “What insurance do I need to start a business?” The user then follows search links and explores pages offering information on these topics.

Machine Interpretation: By effectively tracking the user’s online activity, your AI solution should recognize that this person is researching how to start a business, which makes him or her a viable candidate for the previously-mentioned products.

Example 2: A woman goes to an online retail shop and looks through various product listings for newborn baby clothes. Later, she looks at cribs and other related items.

Machine Interpretation: Your analytics software can deduce that this woman is likely preparing for the birth of a child. This circumstance makes her a potential target for health or life plans.

Other Examples: Someone spending a lot of time sifting through real-estate listings is a possible target for home insurance. If the person is, instead, looking up real-estate agents or “best time to sell a home,” he or she is likely a seller, but may need insurance on the next home or rental property.

An artistic representation of the gathering of many insurance customers' data.

Gathering data

High-quality data is the foundation for effective behavioral targeting. You have a few different options for gathering data.

Request data from current customers

In addition to tracking their on-site and online behavior, you can invite current customers to share more information in their profiles that offer insight into their lives.

Track with cookies

As noted, online data-tracking is a common way in which companies monitor the behavior of online users. You just need to properly disclose your data tracking (and use of Cookies), particularly to meet legal requirements of the General Data Privacy Regulation (Europe) and a similar California data privacy law.

Acquire data

You also have the option to acquire behavioral data from a third party. Some research firms specialize in building prospect lists based on their data-tracking and research efforts. This approach makes sense if you don’t have the infrastructure or resources to collect and interpret data, or you just want to outsource these activities.

Delivering messages, recommendations, and solutions

After you know who to target, your action plan shifts to effective targeting. You must offer outgoing and incoming cross-platform communication opportunities that fit the preferences of each individual. Allow your customers to identify how they prefer to interact.

Similarly, determine which methods are most preferred and effective for delivering recommendations and offers. Analyzing your response rates is beneficial. You can also ask customers to share preferences. Perhaps, of greatest importance, only deliver offers that are relevant to the individual. This strategy is what gets people to pay attention.

A financial services professional working on a laptop in a hybrid work environment

UP NEXT: Ensuring security in financial services hybrid work environments

 

Let RingCentral connect you with your customers

The data is clear; people want personalized offers, and experiences from insurance providers. And, there are significant competitive and financial advantages gained when you deliver.

RingCentral is a leading provider of cloud-based cross-platform communications solutions, which enhance personalization capabilities for insurance providers. Key benefits include:

  • Customized channel engagement based on customer preferences
  • High first-call service resolution rates with smart routing
  • Support for multiple teams in multiple locations
  • Data capture and analysis of important KPIs and metrics
  • Superior customer experiences
  • Security and compliance with all regulatory standards

Want to see it in action? Request a demo to see how it works.

Modified Feb 22, 2022, updated Feb 23, 2022


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