The relationship between insurers and their customers is not always a happy one. Buying cover is a mundane necessity rather than a willing investment, and it’s never easy to cultivate a meaningful relationship when the touch points are limited to the initial purchase, renewals, or when making a claim.
It doesn’t help when some insurers resort to the cynical practice of dual pricing; i.e. exploiting loyal customers with price hikes while attracting new customers with big discounts. Instead of pursuing smash-and-grab profits, insurers should be building revenue by maximising, rather than undermining, customer loyalty.
Keeping the 20 per cent happy
Research shows that about 20 per cent of customers end their relationship each year with an existing carrier and move to a new one. But enlightened insurers are now focusing on customer experience and using big data and insurtech to promote their businesses.
So, how can insurers get closer to their customers? The answer is through data enrichment, better data analysis, and greater connectivity – all areas in which RDT excels.
The hunt for data
Data has always been the bedrock of insurance as it’s the details that help insurers assess risks. And now that there is more data than ever, the challenge is to combine it and create a single view of the customer.
The more you know, the stronger the foundation to build customer relationships. Through Equator, RDT’s centralised rating hub, insurers have access to the widest range of information from sources such as LexisNexis and Experian.
Processing the data
Once the data is gathered and filtered, analytics can make sense of it. Insurtech helps build group and individual profiles and identifies patterns and trends that help to refine products and tailor them to customer needs.
A more personalised brand of insurance can then emerge, with insurers anticipating what customers want and reinforcing existing relationship by providing the right service at the right time. Increasingly, this may involve products and services that go beyond simply underwriting risks and paying claims. Data opens the door for new types of relationship, giving digital insurers a wider platform for business. In all these areas, RDT is continually exploring ways to extract value and help insurers retain existing customers and win new ones.
Time and motion
Communicating in the way customers want you to, and when they want you to, is another route to increase loyalty. Relationships are built on communications that are mobile, on-demand, and omnichannel. Customers want everything in one place. They expect convenience, simplicity and speed, and will be quick to shop around if their current provider falls short.
Here again, RDT is creating technology bridges – not least by developing advanced app technology for personal lines clients. See the TRiCE case study as an example of this.
Big data and insurtech are redefining the traditional role for insurers and enabling them to become more broad-based and responsive service providers. And in so doing, insurers will win the confidence and loyalty of customers.