Shweta Majumder, Product Specialist, TCS BaNCS

Today, the insurance industry is approaching a new era of customer segmentation where insurers can personalize their product design, marketing, and sales strategy. With new age technologies like AI and advance analytics (coupled with data accessibility through APIs), it is now possible for insurers to understand what their customers truly want, when they want and how they can provide services to their liking, shifting their focus from KYC (know your customer) to UYC (understand your customer). 

A hyper-personalized approach means that insurance firms must traverse a fine line between privacy laws surrounding the hosting and processing of customer information and offering them the right products, at the right time. 

How do leading insurers and technology providers manage this conundrum? 

Insurance industry works on personalized data, tailors the information to identify the low-risk customers, develop a deeper understanding of those customers and offer them lower premium policies promising better services.

Insurers can focus on offering their customers the right product, at the right time through the right channel. Intelligent AI tools and Analytics help insurers by leveraging information and analytical capabilities as well as managing the value chain in a more contextual way. The insurers should take proper measures to understand the circumstances and respond in a more sympathetic and relevant manner.

Insurers are taking strategic measures by employing advanced solutions to draw comparisons from similar businesses to provide insights on where companies may lack sufficient coverage, or where they might be paying more than they need to. Perhaps most interestingly, these solutions can also adapt pricing models based on factual, transactional and behavioral information it aggregates from a variety of internal and public data sources.

What best practices insurers are adopting and how are their customers responding?  

  • Delivering the right products /offerings to customers: Since insurers have a large amount of customer data, they are leveraging this to derive intelligent decisions, thereby gaining a competitive advantage. They are analyzing data which is captured strategically (collecting/recording the right kind of unique data during each customer visits) and achieving the desired results by providing customized offers (based on their previous interactions). They are experiencing noticeable growth in offerings like 360-degree customer view for relevant products and services, especially for the on-demand, and usage-based insurance products. 
  • Reaching customers more effectively at the right time: Timing is the most important factor for targeting the customers more effectively. Hyper personalization requires to model the customer behavior and use algorithms with real-time data to decide on the optimal time to deliver an alert, offer or any type of communication. Every touch point in a customer journey can be benefitted from hyper personalization by engaging with consumers directly and foreseeing their needs more accurately. 
  • Reaching customers through the right channel: Insurers utilize various distribution channels to reach out to their customers, whereas most of the customers prefer visiting the insurers in person, through their website, or mobile apps for making any purchase decision. So, the insurers must engage their customers through the right channel, so that they can connect easily, research upon their requirements and also help them to make a purchase decision. So, insurers must ensure to deliver personalized content and messaging across all their websites, social media, apps, or any other emerging delivery platforms.
  • Retaining customers through the right digital experience: Insurers must understand that providing a superior customer experience is a bare minimum expectation now, along with being a competitive advantage. Capturing new customers and retaining the existing ones is very critical in today’s digital landscape. Insurers need to build their trust and maintain the experience for the long term. They should upgrade their business model to new digital experiences with agility and personalized services. 

For many insurers, the future of personalization will center around making better use of the existing technologies to engage customers with greater accessibility and educating them on the insurance products, - the need for it and how it’s going to benefit them. Today, the consumers are flooded with multiple options available at a single click and to be competitive, insurers must provide highly relevant and targeted products/offerings which best suits their brand image, customer relationship and business objectives. So, it is very crucial for an organization to develop a roadmap, where they can understand how customers purchase, what their needs are, what they are looking for and decide what personalized elements should be developed, when and how. 

Disclaimer: Views or opinions represented in this blog are based on the author’s own research and do not represent TCS BaNCS.

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