How insurers are providing the ultimate tailored customer experience
With Consumer Duty coming into force, the end-to-end customer experience is central to not only customer aquisition and retention, but now to regulatory requirements. Hyper-personalisation is one method in helping to form customer-centred operations.
What is hyper-personalisation?
Hyper-personalisation can be achieved by utilising datasets to deliver highly personalised and tailored products, services or information to customers. Real-time data can be incorporated to adapt personalised and targeted offerings across all stages of the customer lifecycle, from initial engagement to policy renewal.
Customer expectations are changing
Insurance customers are now expecting hyper-personalised as a standard part of service, rather than the unique selling point it was in previous years. A recent Gartner survey recorded that 63% of consumers said it was important that their insurer provided personalised services. With the implementation of Consumer Duty, insurance organisations must have a detailed understanding of the expectations of their customers to provide the seamless experience expected by the FCA.
Use case: How insurers can support consumers on google
If someone is searching and shopping for a holiday, targeting them with travel insurance may improve the chances of getting their business, and if the types they are searching is available, such as a cruise or sports holiday, then the offering could be further narrowed to something more specific to these cases.
Use case: How to lower prices for first-time buyers
A chat bot could guide an existing customer through a claims process to ensure they have added the right details and information. A common example of hyper-personalisation already seen in car insurance is to incentivise first time drivers to get telematics units installed in their vehicles which results in lowered premiums when good, low risk driving is detected. Hyper-personalisation can be a benefit to both the customer and insurer; the customer can get something tailored to their exact needs that changes according to their real-time usage and behaviours, and the insurer can benefit from the data-driven approach helping to provide more accurate and less risky policies as well as a deeper understanding of the customer.
Build a deeper understanding of your customer
A significant challenge with hyper-personalisation is the ability to analyse a large volume of data from different sources to build up the rich understanding of a customer. A traditional approach for personalisation is to segment the customers on basic, static demographic information like age, gender and employment and then manually analyse these segments and design products around them. However, this process can lead to gross generalisations that can only ever fit the average case perfectly and so are unlikely to fit everyone's specific needs.
The amount of data used would need to be increased so that more granular segments can be discovered but this would result in a greater amount of analysis needed to create a greater number of products. This would quickly become unfeasible to be done manually therefore automating some elements of this would be required to enable hyper-personalisation. Additionally, static cuts of data would quickly become outdated and not able to reflect real-time changes in behaviours.
Insurers are achieving AI-driven results
AI can aid with these processes, where models can learn from data and make predictions on what actions to take. They can be designed in a way that allows them to utilise new information as it is made available on a dynamic, ongoing basis. These predictions are specific to a particular user and their behaviour, and as they can update based on current circumstances and the actions customers do and don't take, they are highly relevant at all points of a customer’s journey. AI can use volumes of data far beyond the capabilities of manual processing so they can enable the inclusion of a variety of datasets. This can boost an insurer’s understanding of their customer base which can help drive tailored experiences.
If you're unsure about the quality of your organisation's data, watch our recent webinar to learn from our experts on how you can get your data right.
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