Is the time proper for insurers to make main strikes primarily based on new buyer sentiments? Using three buyer personas, beneath, we study a brand new alternative in insurance coverage: customer-directed prevention and safety. Each state of affairs offers us perception into how insurers would possibly collaborate with policyholders to cut back threat.
Cameron pays consideration to all of the neighborhood information on his Nextdoor app. He notices that lots of his neighbors have put in their very own surveillance techniques by firms like Ring and Nest. He likes the thought of video techniques which can be tied in along with his full house community, together with thermostats. He enjoys the management he has over his house techniques, even when he travels. He feels extra comfy being away when he can remotely tune in to his house.
Sheila had her automobile stolen exterior of her house in March. She preferred her automobile, however what she disliked most about dropping it was the inconvenience of the method. When she requested her agent what she may do to maintain it from occurring once more, the agent steered including some safety tech to the automobile. Right after buying a brand new automobile, Sheila had a touch cam put in. She added a GPS monitoring tag and a wheel lock. She is now on the lookout for an house with safe storage parking.
Natalie purchased herself an Apple Watch after a co-worker confirmed her how nicely it was monitoring her train and sleep. The watch’s ECG perform caught an irregular coronary heart rhythm that allowed her to get handled earlier than one thing main occurred, comparable to a stroke. Now Natalie refers to her watch because the “lifesaver.”
What is fascinating is that in every of those instances, the shopper has the motive to spend their very own cash on reducing their very own threat. At the exact same time, their insurers (which have each motive to be happy) aren’t that considering discovering out who’s and who isn’t proactively defending themselves and their property, not to mention develop new merchandise that value in another way for it. Insurers who develop extra digitally adept and knowledge savvy can create and develop a brand new sort of buyer relationship, solid on a standard want for threat avoidance and mitigation.
It’s time to get .
A bridge to the longer term with foundations in a shared want to decrease threat
Three of Majesco’s annual reviews, our Consumer Trends report, SMB Consumer Trends report, and Strategic Priorities report, are designed to assist insurers grasp the methods through which they could join their companies with the wants, expectations, and motives of consumers. As we dig into the key and minor particulars of buyer developments, we additionally make strategies about how insurers would possibly reap the benefits of shifts in utilization or shifts in motive. We ask questions concerning life, buy patterns, and areas of curiosity. We look intently at connections and disconnections between what clients need and what insurers are offering and use this as enter to our product roadmaps to assist our clients keep in-sync or forward of their buyer wants and expectations.
As we take a look at the subject of threat resilience, we’re beginning to see a quickly rising want for insurers to coalesce their considering behind a brand new imaginative and prescient of threat — the shopper’s view of threat. It’s at this level that insurers can reply their very own questions on the correct merchandise, pricing, and channels that match in the present day’s buyer wants and expectations.
For insurers centered on new merchandise, pricing, and new channels, the main focus is on development and profitability. One approach is by lowering the circumstances of threat in a world the place threat appears to be shifting and rising by leaps and bounds. Prevention and safety have gotten the advertising love language of the insured — eclipsing restore and restoration. If we glance by the lens of statistics, we could conclude that there’s a new dynamic in insurance coverage — a tightening bond between the shopper relationship and insurer efforts to decrease threat considerably. Here’s an outline of the difficulty at hand primarily based on our analysis:
- Customers are more and more considering defending themselves, their property, autos, and well being.
- Insurers are, general, extra preoccupied with inner operational areas. They are much less involved about among the dangers that their clients are involved about.
- If insurers may successfully faucet into buyer curiosity in reducing threat, they may create a win-win for themselves and their clients by increase resilience in opposition to threat. In doing so, insurers may considerably affect and positively influence prices, profitability, and buyer retention.
Let’s take a look at every issue individually.
Customers are more and more extra considering defending themselves, their property, autos, and well being.
Consumer spending on good house gadgets has skyrocketed lately. Between 2020 and 2021, there was a 43% improve in good house gadget gross sales. Home safety spending was anticipated to succeed in $5.43 billion in 2022 and $9.14 billion by 2027.[i]
Video cameras have been the fastest-growing good house equipment within the first half of 2022 (55% development from 2021 to 2022). Smart doorbells additionally had a 43% improve 12 months over 12 months. Video doorbells are actually owned by a minimum of 14.6% of Americans.[ii]
Growth is astounding within the wearable health monitoring sector, with utilization tripling between 2016 and 2019, then doubling from 2019-2022. Globally, over 1.1 billion folks personal and put on a health monitoring gadget. Over 30% of US adults use a wearable healthcare gadget, with 82% of those that are “willing to share their health data with their care providers.”[iii]
These statistics level in the identical course. People are rising comfy with utilizing know-how to guard themselves and to grasp and management their lives and well being. Can insurers reap the benefits of this new stage of curiosity and utilization to interact clients in a protecting partnership? Can insurers and clients work extra intently collectively to keep away from threat and assemble a framework for threat resilience?
Healthcare’s lesson for P&C and L&AH insurers
Without going right into a historical past lesson on Consumer Directed Health Care (CDHC), the idea behind it’s essential. The extra that folks have a say in the place and the way cash is spent on their well being, the much less they may spend on pointless procedures and the extra they may maintain their well being. Not each aspect of consumer-directed care is working. For instance, consumer-directed care was alleged to drive down the prices of well being care as a result of folks would “shop around” for suppliers. That portion has but to show true.
Most consumer-directed care, nevertheless, is working. People are paying extra consideration to their well being and their care. The incentive to remain wholesome is enhancing well being, plus it’s enhancing curiosity in private well being statistics, like these measured with wearables comparable to an Apple Watch and Fitbit.
The similar customer-directed motives can be utilized by insurers within the P&C and L&AH areas. It’s the correct time to associate with clients within the choices they should make about how, the place, and after they shield themselves. Insurers must be ready to grasp their clients higher and be able to step in to help those that are motivated to remain secure and wholesome.
Insurers could also be much less involved about among the dangers that clients are involved about.
Many insurers are nonetheless prioritizing their inner points over their buyer understanding and experiences. When they do have shared considerations over threat, insurers are typically much less engaged and fewer anxious than their clients.
Are insurers and clients aligned on their considerations?
Recent Majesco analysis uncovered some buyer/insurer disconnects that we are able to use as examples. In our latest thought-leadership report, Game-Changing Strategic Priorities Redefining Market Leaders, we tracked insurers’ top-of-mind points. (See Fig. 1).
Figure 1 – The most vital points for insurers
If you skim simply the highest six considerations, you see inner priorities that concern executives. These are actually essential to insurance coverage operations. However, insurers’ decrease concern about External Risks is misaligned with their clients’ views, particularly on the problems of crime and local weather change. (See Figure 2. Pay shut consideration to the Insurers’ stage of curiosity vs. their clients.) Gaps in considerations about crime are giant, starting from 36% to 38%. Gaps in local weather change concern are decrease however nonetheless regarding, from 12% to 26%. Gen Z and Millennial SMB homeowners are additionally extra involved about elevated dangers as a result of extreme climate (7.3 vs. 6.5) and deal with ESG elements (7.2 vs. 6.3). As clients more and more take a look at who they do enterprise with throughout different elements, comparable to ESG and local weather change positions, this might shift who they do enterprise with long-term.
Figure 2 -Disconnects between insurers and clients in considerations about crime and local weather change
It’s simple to dismiss statistics like this, however why would you need to? An understanding of consumers may also help insurers as they put together to interact extra deeply. For instance, “74% of Americans who are concerned about climate change own a smart home device.” The hyperlink between the 2 will not be simply understood, however it’s clear. Many smart-home gadgets are designed to save lots of power. People involved about saving power could also be involved concerning the atmosphere. Climate change can also be more and more tied to catastrophic threat occasions. It is the sort of statistic that reveals how important it’s for insurers to understand which of their buyer varieties are probably to associate with them in efforts to guard and forestall.
Insurers must be making the most of the truth that clients need extra management over the dangers of their lives. To do that, they might want to perceive their buyer’s motivations and their wishes to self-direct their safety.
If insurers may successfully faucet into buyer curiosity in reducing threat, they may create a win-win for themselves and their clients by increase resilience in opposition to threat. In doing so, insurers may considerably affect and positively influence prices, profitability, and buyer retention.
Customers need confidence and safety, however insurers promote them a loss-recovery contract. While most insurers are centered on how they’ll higher assess threat, many extra are increasing to additionally deal with the prevention of losses and creating threat resilience for patrons. The outdated adage of “control what you can control” is now entrance and heart for insurers as they take a look at new threat administration methods as an important element of their underwriting and customer support technique.
What are insurers doing in the present day?
It is essential to establish, assess, and create plans to attenuate threat. Leading insurers are leveraging know-how comparable to IoT gadgets, good watches, loss management surveys, and value-added providers to not solely assess and monitor threat however to proactively reply to it with mitigation providers and actions. From concierge providers to monitoring water hazards and the security of workers, to serving to to stay wholesome life, main insurers are shifting to threat resilience methods that not solely drive higher enterprise outcomes but in addition nice buyer loyalty and retention.
Where does Cameron’s house insurer match into his want for whole-home monitoring? Can his insurer step in with incentives, with higher monitoring software program, or with expanded sensors for issues like water injury to supply real-time alerts? He is prone to respect the cooperative efforts of his insurer to guard his house. Chubb, for instance, is a proponent of leak detection applied sciences. Chubb shares gadget prices by providing premium credit to some policyholders that set up leak detection gadgets.[iv] Where are there different alternatives for threat mitigation the place insurers and policyholders can work collectively?
How can Sheila’s auto insurer give her higher peace of thoughts safety and an expertise that matches together with her have to preserve her automobile from theft? Can auto insurers do a greater job of defending in opposition to theft, directing auto consumers to automobiles which can be powerful to steal, or enhancing their capability to get well shortly? So far, insurers aren’t motivated to offer steep reductions for the usage of protecting applied sciences. Are they a minimum of capable of finding out which policyholders are actively working towards threat prevention?
The use of Apple Watch and Fitbit knowledge for all times insurance coverage is well-documented, however nonetheless not in large use exterior of John Hancock’s Vitality. But the place are the opposite life and voluntary profit insurers who would possibly group up with policyholders which can be making nice strides for his or her well being? With well being knowledge monitoring on the rise, insurers must be methods through which life/property safety applied sciences can work throughout silos to learn each insurers and policyholders.
How can insurers information their insureds to eat more healthy, train recurrently and avoid recognized dangers? How can they domesticate a brand new sort of buyer relationship that’s primarily based on enhancing their lives, defending folks and property, and understanding dangers in any respect ranges.
For most insurers, threat resilience begins with correct use and understanding of buyer knowledge and preferences by next-generation core, digital and knowledge know-how.
Are insurers ready to assemble and analyze the numerous kinds of knowledge that may give them insights into buyer habits and motivators? Are they then ready to develop services that match customer-directed motives for their very own safety? As threat grows globally, insurers want to organize by switching their applied sciences over to cloud-based platforms the place knowledge flows simply, connectivity is simplified and safe, and insights are visible.
At the next stage, insurers want to think about their clients as companions in threat resilience — tapping into their very own want to maintain themselves wholesome, secure, and safe. For extra info on growing a risk-resilient know-how atmosphere, remember to watch Majesco’s webinar, Creating Customer Value, Security and Loyalty in Times of Change by Rethinking Insurance. Also take a look at Majesco’s market-leading options together with P&C Core, L&AH Core, Data & Analytics, Loss Control, Underwriter360 and IQX Underwriting which can be offering the muse and capabilities of a risk-resilient know-how atmosphere. And, for a deeper dive into the strategic priorities of market leaders, remember to learn, Game-Changing Strategic Priorities Redefining Market Leaders.
Control what you possibly can management … a subsequent technology threat resilient know-how basis.
[i] Smart Home Report 2022 – Security, Statista, December 2022
[ii] Smart Home Market Report, p. 13, August 2022, PlumeIQ
[iii] Chandrasekeran, Ranganathan, Vipanchi Katthula, Evangelos Moustakas, Patters of Use and Key Predictors for the Use of Wearable Health Care Devices by US Adults: Insights from a National Survey, October 16, 2020, National Institutes of Health
[iv] Rabb, William, Insurers Making Waves with Wider Use of Leak, Temp Sensors, January 31, 2022, Insurance Journal.