Historically, insurers have leveraged data throughout their business to select, assess and price risks. But today’s customers want more than insurance coverage; they expect tailored, personalized service.
For example, the Accenture Consumer-Driven Innovation Survey found that 92 percent of customers would switch to an insurer that provided personalized services. Further, the Accenture Personal Data Survey looked at 600 companies around the world to see how organizations view the use of personal data. Respondents said the key benefit, by far, was the ability to deliver a better customer experience through personalized services.
These findings point to three main business benefits to gathering and using personal data:
- Customer innovation. In 2014, online marketplace Alibaba recorded sales of US $9.3 billion in a single day. How? By using data to make predictions and display personalized recommendations to customers. On Singles Day, a huge shopping event in China, they were able to provide each customer with a tailor-made list of discounted items to buy.
- Product innovation. Several auto insurers use telematics as a way to collect driver data and are adapting their product to a pay-as-you-drive model. This provides insurers with access to a richer data set consisting of actual driver behavior rather than having to rely on proxy data, such as credit score or demographic data. Auto insurers can use this new source of data to enrich their pricing model or offer new services. In the life insurance space, John Hancock was first in the United States to offer discounts for customers who allowed the insurer access to data from their FitBit wristbands.
- Market innovation. Many companies that collect personal data can leverage it to enter new markets. For example, in the UK, several supermarkets have leveraged their insights into customers’ spending patterns and personal profiles to expand into financial services. Further, 33 percent of businesses we surveyed earn income by selling anonymized data.
These opportunities come with a caveat: it depends on consumers being ready to have their personal data leveraged in these ways. I’ll discuss this in more detail next week.
- Download Guarding and Growing Personal Data Value (PDF).
- Register to download Accenture Consumer-Driven Innovation Survey: Playing to win (PDF).
- Learn more about digital trust, one of the five technology trends identified in Accenture Technology Vision 2016.
- Email me to discuss how Accenture can help you derive business value from personal data.