The vital importance of personalization for P&C insurers
Personalized messaging, offers, and experiences at scale are becoming more than simply an unprecedented opportunity for P&C insurers due to mounting competition and rising customer expectations. Any carrier hoping to take a sizable lead over competitors may find it to be strategically necessary very soon.
Digital channels have witnessed a major transformation in recent years, affecting far more industries than only insurtech. The current environment has made users more in need of tender affection and care; thus, they are now demanding a high degree of personalization from all businesses, including P&C insurance.
They actually demand it, that is how much they value it. More than seven out of ten customers increasingly demand personalization as a given when interacting with businesses, and over seventy-six percent become irritated when they don’t, according to McKinsey. Personalization can have enormous benefits as well. Revenue improvements of 10% to 15% are possible for businesses that excel at customization; best-in-class performers can see rises as high as 25%.
Although this movement was started by industries other than P&C insurers, it is now the responsibility of the industry’s companies to keep up if they want to stay relevant in a very competitive market.
For many insurers, putting these solutions into practice—which send clients individualized messages including coverage options, policy recommendations, and all the related policy documentation—can be intimidating.
This is even more true when you take into account that this degree of personalization is available via text messages, emails, in-app offers, call centers, and more—across both digital and human channels—at every stage of the consumer experience.
Are these radical adjustments, though, worth it? Is it better for P&C insurers to take a risk? Why introduce such a system and what would be the benefit?
First, compared to the ongoing usage of mass, one-size-fits-all communications or discrete campaigns employing simple segmentation or personas, customization can help reduce client acquisition expenses by 50%.
Additionally, it can support insurers in maintaining and growing their portion of current industry earnings. According to McKinsey, for example, U.S. auto insurers might benefit an extra $5.5 billion if they use customization to hold onto just 10% of the $55 billion in direct written premiums that are transferred annually between carriers.
The true difficulty lies in perfecting personalization at scale throughout the insurance life cycle, but these evident cash flow benefits will undoubtedly have carriers on the lookout for change.
In order to do this, carriers with a contemporary, cloud-based insurance platform have an inherent advantage. In the absence of a bespoke system, you are forced to switch between fragmented systems, which prevents true scalability.
For instance, the Guidewire Cloud Platform provides omni-channel, tailored customer communications for the billing, claims, and policy processes.
For scalable, customized communications, Guidewire has partnered with Smart Communications, a market leader in conversation management platforms.
Everything is managed by a single, cloud-expandable platform, which means that there is no need to maintain different systems and that scalability is unlimited as needs for channels, storage, and other resources increase.
Incorporating a more customized strategy into their present systems can yield a swift return on investment for P&C insurers with the appropriate solutions in place. The personalization necessity isn’t limited to P&C insurance, as devices like Guidewire have already assisted carriers in launching personalized communications at scale in over 100 installations globally in a timely and economical manner. The time has come.