What does peace of mind mean for a common man? Prevention and protection against risks isn’t it? While insurance companies are doing one part very well, i.e. protecting you against various risks, they are not helping much when we talk of prevention. And this is obvious, right? Because if an insurance firm helps you prepare for adverse situations, how will it sell its products? A conflict of interest – don’t you think? Not really. Helping customers prevent risks is an opportunity will project insurance firms as true well-wishers of their customers – something that’ll reinforce customers’ trust in the brand.
Most of the customers who buy P&C insurance forget about it until an event triggers the need to invoke the claim or when the renewal date is around the corner. Insurance companies must devise ways to change from event driven engagement to continuous engagement, which is critical to win and retain customers.
With insurtech companies coming to the fore, traditional P&C insurers have to change their customer engagement approach. They have to position themselves as a trusted well-wisher to the customers instead of merely an insurance seller.
P&C insurers today are focusing on reducing costs, improving operational efficiency, and enhancing customer experience by creating new-age business models using artificial intelligence (AI), robotic process automation (RPA), and advanced analytics. Incumbents partnering with insurtech startups is also gaining steam.
Given that the barriers for a customer to change insurance carrier are diminishing, it is critical for P&C insurance companies to find ways to effectively engage customers. For example, a property insurer can help in proactively identifying issues in the house plumbing to avoid leakages and reduce potential insurance claims, or share tips to protect the property from untoward events such as burglaries, storms, fires, and so on.
To achieve this, insurers could deploy a cloud-based ‘wellness’ platform that customers can access online or as a mobile app. Such a platform will enable customers to manage the health of their property and help insurers drive continuous engagement with their customers. The AI-based platform will compute a ‘wellness score’ for a user based on the data picked up from the sensors on his/her property, and benchmark it against the industry standard. This will help property owners ensure superior upkeep of their property, which can in turn help them earn ‘points’ on the integrated digital wallet. These points can thereafter be redeemed against a host of property related services (such as surveillance, pest control, plumbing, and so on), the providers of which will also be on the platform. In essence, it’ll be a marketplace of sorts.
The platform could also have a ‘digital locker’ feature that allows users to store important documents including insurance policy documents, appliance bills, contract documents, and maintenance and warranty documents. Gamification features and integration with social media will enable users to form communities and groups with fellow subscribers, for information sharing and issue resolution.
Being on the cloud will enable P&C insurers to quickly deploy the platform in an agile manner and scale up as and when the need arises. Insurers can charge fees to the service providers’ onboarded on the platform. If any customer buys a service through the platform, then a referral fees can be charged to the service provider by the insurer. This will help in self-funding the platform.
This approach can allow insurers to move from a product based relationship to a value added lifetime engagement model. As humans, we all like to be associated with our well-wishers, a wellness platform will allow insurers to gain customer loyalty and increase customer lifetime value (CLV) by continuous engagement through the platform. Moreover, it will also help build a positive perception among the government, law makers, and regulators who traditionally view insurance companies as large profit-making organizations. For the insurers, the wellness platform can help accurately assess risks by applying advanced analytics on the data collected, which can in turn ca enable mass personalization and help customize the premium based on individual customer profile.
Preventive and predictive wellness measures can further improve the bottom line due to reduction in claims payout. P&C insurers can influence a significant behavioral change in customers by providing a cloud-based intelligent wellness platform that enables customers to manage risks proactively. Wellness as a theme should be wrapped around existing insurance products and it should be embedded into all insurance-linked customer processes. This will mark a shift in the business model of P&C insurers – something that is more aligned to evolving customer expectations and market dynamics.