In my last blog, I argued that as insurers began to build ecosystems to service their customers better, it would make sense for these ecosystems to share customer data as well. This approach, I went on to say, could fit in well with the concept of a shared platform (perhaps operated by a trusted broker) which provided access to this data as well as advanced analytics capabilities to make good use of it.
There’s, of course, another option: insurers simply buy the information they want from a third party, such as a telecommunications service provider or a national estate agency. I tend to think that this will be a transitional option for most insurers because most will create ecosystems anyway to deliver multi-faceted customer experiences, as I have already described. In addition, the ecosystem approach based on some sort of common data platform could be designed to include some sort of offsetting mechanism or joint ownership, meaning that the cash cost of the data would be greatly reduced.
As an example, let’s look at the case for a financial services company, a telco and a supermarket chain to from share information to refine their customer profiling capabilities. Specifically, what would be the benefits for insurers?
There are several:
- Build a broader view of clients. Combining the client view of these three industries will allow the insurer to build a much better understanding of client behavior and expectation, in turn enabling finer segmentation and personalization of the customer experience.
- Life-event triggers. Insurers have relatively few touchpoints with clients, so would benefit from the more granular view that, say, a telco or retailer would have. In particular, this information could help insurers proactively identify life events that typically trigger purchase or renewal behavior. For example, a telecommunications provider or national estate agency would have very early information that a person was buying a new house or moving cities. Imagine how impressive if an existing customer received an offer of reduced insurance cover for a move coupled with a deal from a removals company plus an introductory telecoms bundle at the new address.
- Add on services. More services yet could be added to the bouquet; for example information about schooling in the area, church congregations and business associations, and so on.
- Location-based information. Telematics in particular is already providing insurers with ways to refine their offers to existing (and potential) clients—for example, by linking automotive cover to driving habits or frequency. But, as in the previous point, this information could also prompt added services, such as hotel information for travelers and the like.
In other words, insurance becomes part of a lifestyle package, a total customer experience that is tailored (using information from all of the ecosystem participants). The result: a solution that is not only customer-relevant but also deeply customer-pleasing as well.
But, as always, baby steps first. Insurers need to begin with learning how to use the massive stores of data they already have. Once they have done that, they will have created the business case, and can begin to move in the direction I have suggested in concert with their overall journey towards becoming holistic, connected and truly customer-centric digital insurers.
Read more about achieving payback in insurance analytics.
Next week, I’d like to start exploring some insights derived on our Customer-Driven Innovation Survey.