By Sameer Gupta
Life insurance customers today expect their insurer to offer products that match their specific needs, deliver them through hassle-free processes, and also provide prompt policy servicing. Responding to their changing needs and evolving market dynamics, life insurance companies and their bancassurance partners are turning to technology-powered personalisation to redefine customer engagement. They are using digitalisation and data analytics to transform and hyper-personalise engagement across the entire spectrum from prospecting and product offering to processes and policy servicing.
Granular data obtained with the help of analytics is enabling the shift from a mass-marketing approach to a segment-of-one approach, based on deeper customer insights. Getting the offering right strengthens the connect as customers can cut through the policy clutter before engaging offline with the provider (the insurer or the bank) to seek last-mile personal guidance and lock in the perfect life insurance policy.
So, how are insurers and their banking partners personalising customer engagement? Let us take a look.
Sharpening the prospects
It is critical for life insurance distributors to know their customers as distinct individuals. Now, no one understands the customer’s financial behaviour better than banks with their vast customer base, legacy relationships, and country-wide penetration. However, it is not feasible for a bank to reach its entire base of, say, 20 crore customers. It needs to optimise which customers to target and also customise the messaging for different customer needs.
Using digital technology and data analytics, banks are designing propensity models to identify the right prospects. Further, they are drawing meaningful insights from their legacy customer relationships to hyper-personalise their proposition and advise customers on the best life insurance product for their needs. In this endeavour, every aspect of customer data with the bank is factored in – is it is an asset-based relationship or a liability-based one, is the customer risk-averse or not, is the customer looking for an investment solution or insurance solution, etc. The responsible mining of data assists banks in personalising the solution.
For instance, a propensity analysis can help a bank branch to zero in on say, 100 of its 10,000 customers who may have a high propensity to invest in an insurance product. The data analytics could help identify a customer’s need for a specific insurance solution, such as a child plan, so that the marketing collateral can be hyper-personalised accordingly. Sometimes, the propensity model can provide confirmation to a banker that they have approached the right customer base and are right selling to them.
Structuring products for individual needs
Data analytics has also emerged as a powerful differentiator in designing structured products for every single customer – something that was the preserve of only high net-worth individuals earlier. For instance, if a bank customer is known to have accumulated savings but does not have a future-ready portfolio, a banker can identify gaps by analysing their financial data, and offer an insurance proposition that can add a guaranteed-return element to their investments.
Simplified processes and smoother policy servicing
Moreover, data analytics is also enabling life insurers and banks to customise processes, and not just products. For instance, based on their customers’ transaction history, life insurers can devise segment-based underwriting guidelines to enable faster and even instant issuance of certain kinds of policies. Besides, digitalisation has enabled insurers and banks to offer paperless and seamless on-boarding.
In terms of policy servicing too, life insurance companies are using digitalisation and data analytics to improve persistency levels by sending timely nudges for premium payments. Some companies are also personalising reminders by providing specific financial data on the potential returns or losses faced by a customer should they fail to renew their policy.
Technology backed by human touch
While technology is helping life insurance companies and their distributor banks enhance customer engagement, they aren’t forgetting the human touch either. After all, life insurance is not just a product; in many ways it is a life-long relationship. Unlike purchasing financial products such as mutual funds or stocks online, customers often seek a personal touch when it comes to life insurance so that they are fully assured on all specifics of a plan before putting their money in it.
That’s why life insurers and bankers are striving to balance technology with the human touch. Armed with digital tools and a customer-first service ethic, they are proactively guiding consumers through the entire insurance life-cycle – as per their needs, in their time, at their convenience.
(The author is Sameer Gupta, Country Head – Distribution Strategy, IndiaFirst Life Insurance, and the views expressed in this article are his own)
