Insurers today have a unique opportunity to reinvent the rules of engagement with both producers and customers. Both demand compassion, convenience and trust — all while business is being conducted remotely rather than face-to-face. And amid the current economic turbulence, now is the time for insurers to develop more personalized, holistic and integrated solutions to be positioned for success now and in the new normal.
To do this, insurers must leverage data and analytical capabilities while rethinking the value chain so they can respond to producers and customers in ways that recognize their context — that is, taking into consideration their unique circumstances at any given moment — and respond in an empathetic and relevant manner. We call this hyper-personalization, and it is at the forefront of the digital transformation of the customer journey. Importantly, this is not limited to sending out marketing offers. Hyper-personalization is about enabling personalized, contextualized interactions across sales, marketing, underwriting, servicing and claims.
Already, the most forward-thinking insurers are embracing this approach. They are exploring new partnerships and business models to create integrated, value-added experiences centered on the overall health and financial wellness — not just the insurance needs — of their customers. They are investing in new data sources, analytics platforms and artificial intelligence (AI)-powered decision engines that can match producers with like-minded customers or can engage customers with enticing offers and action steps based on their previous choices. The result: producers can more efficiently and effectively serve their customers, consumers can have more trusted and convenient interactions with their insurer, and insurers can drive customer engagement and growth in an increasingly digital-oriented world.
Of course, execution is everything, and organizations may need to invest in the long-term value of the relationship. Here are some strategies to help your organization create more personalized and connected customer experiences.
1. Invest in your data asset
Enabling hyper-personalization involves breaking down core data activities into discreet building blocks. First, insurers should start generating a data pipeline to deliver producer and customer insights. This includes capturing your proprietary information from a variety of sources, including customer relationship management and account data, web and marketing data, channel interaction data, household data, and claims and fraud data. Your proprietary first-party data is a treasured asset and can be augmented, but never replaced, with second- and third-party data. The data sets should be stored in a persistent data store that informs a producer and complete customer profile. Graph databases offer an excellent way to quickly build the 360-degree view. Organizations that have previously tried and failed or are still on this journey should stop and consider whether a graph database makes sense.
Finally, it’s important to note that customer data is fluid, so a process to proactively collect, update, manage and secure data is required. That’s why establishing clear data collection, analysis, storage and privacy protocols are essential to any successful hyper-personalization.
2. Deploy fit-for-purpose technology
Data is considered the lifeblood of hyper-personalization, and it fuels the real-time decision engine. So how does it work?
The 360-degree view is ingested by a decision engine, which identifies signals or triggers indicating a producer’s and/or customer’s context. Potential next best actions from a library (action library) are identified by AI and/or machine learning; these actions could include communications, content, offers and services. The arbitration function is then deployed to prioritize actions, taking into consideration business policy set by the insurer and consent granted by the customer. All of this is done in near real time. Just as data must be managed on an ongoing basis, the library of actions must be continually evaluated for effectiveness.
It’s important to note that the hyper-personalization technology landscape is complex. Some tools are called journey orchestration engines while others are called real-time interaction engines. Regardless of terminology, these systems will orchestrate recommendations across sales, marketing and servicing, including underwriting and claims.
3. Reorient your organization toward customers, not products
Traditionally, most insurers have been organized around the sale of individual products, not customer needs. Hyper-personalization requires taking precisely the opposite approach: this means rethinking almost every element of the business — from sales incentives, product development and underwriting processes to marketing goals — from the customer perspective.
For example, at most insurers, marketing responsibilities across channels are highly decentralized. As a result, customers who visit the corporate website are prompted with a very different action than if they call a support representative, and still a different one if they engage with the producer. Each part of the organization is focused on the next-best action (NBA) for the customer based on what’s narrowly best for their area of purview — not what’s ultimately best for the customer.
To achieve hyper-personalization, the organization must put the customer at the center to map out the entire end-to-end customer journey, aligning NBAs to that journey and ultimately reconciling competing departmental interests.
A governance process is also required to prioritize the library of potential actions and enable an agile organization. One leading practice is to identify an enterprise owner — perhaps a chief customer officer, a head of customer analytics or council of senior business executives — to arbitrate between competing NBA claims. The enterprise owner may also need to work with the businesses to adjust sales goals or other incentives that may be at cross-purposes with more holistic recommendations. What’s more, hyper-personalization requires ensuring that recommendations are continuously updated, such as analyzing the effectiveness of the prompts and then regularly revisiting the library of recommendations to make changes.
4. Shift from product-centric P&L to customer-centric P&L
As insurers more effectively harness customer insights, they will be able to create hyper-personalized, integrated and lifestyle-based offerings. The customer, not the product, will be the profit and loss (P&L).
Customer centricity requires that insurers deliver integrated product and service solutions. Increasingly, we see customers are looking not only for traditional protection but personalized solutions to address their broader health, wealth and wellness needs. In fact, a recent EY Insurance consumer and small business survey found that concern about financial well-being has risen to over 8 in 10 US consumers between 25 and 55.