Other parts of this series:
Health, financial, family and lifestyle data sit at the very core of the business for life, pensions and investments providers (LP&I). These firms require large volumes of data to operate effectively and the larger the quantity of customer data held, the higher the potential for relevant, personalised and profitable products and services. However, this requires significant trust on the part of the consumer, and any data breach could be catastrophic to an insurer’s reputation.
In this post, the second in our three-part series examining the nexus between trust, data and relevance, we’re taking a closer look at what LP&I providers can do to harness the massive opportunities data creates, while minimising the risks.
Insurers score comparatively low on the trust index
Right now, there’s a fundamental issue that demands attention. Customers are unwilling to share data with organisations they don’t trust. And, as our UK Financial Services Customer Survey (which surveyed 4,500 financial services customers) shows, less than 30% of customers trust their insurance provider.
What can the industry do about it? The answer is simple: do the right thing. Be responsible data stewards, clearly communicate data protection policies and principles and deliver value based on consumer data. Our research shows data privacy is a particular concern for older generations with larger investment potential, so becoming a trusted partner to these customers will reap the largest rewards.
Maintaining the security and integrity of data
In a world where data is being captured, stored, processed and shared at an ever-increasing rate, maintaining the security and integrity of your data is a serious challenge. Well implemented technology solutions can ensure insurance organisations not only comply with the regulations but build trusted relationships with their customers too.
Customers can be encouraged to provide more data if they’re offered genuine benefits when they do so. For example, providing highly-personalised investment products, accompanied by an AI-driven explanation, if a customer chooses to provide additional information – versus off-the-shelf investment portfolios if minimal data is provided.
Technology alone isn’t enough, however. LP&I providers also need to be transparent about how they’re using individuals’ data. Having easy-to-understand data protection principles and offering a range of opt-in policies ensure customers are fully aware of any data-based exchange that may be taking place.
Richer data boosts consumer engagement
There is a huge upside for providers who can balance the risks and opportunities presented by data. Access to richer data sources makes it easier to spot and adapt to trends in the market ahead of the competition, boosting both the underlying profitability of companies’ products and their engagement with consumers. But reputations are on the line for those that get it wrong.
In the next post in this series, we’ll look in detail at how LP&I providers can use data to maximise the value of their interactions with the market, for themselves and their customers. In the meantime, to learn more, read our 2018 UK Financial Services Customer Survey.