Due to a convergence of external pressures such as: covid-19, the ‘amazon effect’ on customer expectations, rising claim costs, and a hardening market, there is a shift in the traditional roles being played by the modern P&C insurer and their policyholders. Today, insurers are assuming more of a partner role in helping their customers understand their risks and providing solutions to allow them to take on a more preventative role in proactively mitigating their ongoing exposures. Insurance carriers that are leveraging technology to capitalize on this shift are reaping a multitude of benefits beyond just a more risk conscious consumer base.
According to a Deloitte study on customer expectations, 55% of P&C policyholders surveyed cited ongoing risk management and prevention services as the largest decision making factor for purchase and renewal, only topped by price. Customers also understand the importance of these solutions and are not expecting them for free. According to the 2019 World Insurance Report, 37% of policyholder are highly willing to share supplemental data and 55% of those customers are willing to pay extra for those services.
With the proliferation of partnerships with digital service providers, insurers now have an ability drive deeper engagement on-demand and at scale, with tailoring solutions to meet the needs of the insured. As new data streams are generated through service engagement, insurers are now able to gain deeper insight into their clients to support underwriting profitability and strategic decision making, reduce frequency/severity of claims with broader reach and more educated client base, as well as further tailor offerings to quickly address emerging trends and opportunities.
While providing a digital ecosystem of services to help improve the policyholder experience, there are numerous primary and ancillary measurements that help improve the overall lifetime value. Research from BAIN suggests that P&C customers who rate their insurance carrier a 9 or 10 out of 10 (promoter) have a 7-9x lifetime value than their passive loyalist and detractor counterparts, as they have a higher likelihood of higher retention, buy more coverage, and refer more people.
If you factor in reduction in frequency/severity of claims, stronger client insight and underwriting profitability, those numbers could continue to rise over time. If you would like to discuss how in2vate may be able to help you and your organization expand your client engagement, strengthen your user experience and increase the lifetime value of your clients we would love to hear from you and see how we can work together.