Offering additional services to keep and attract customers and providing a superior digital experience is imperative to stay relevant. For any business – the ultimate golden rule is:
“Revenue is Vanity, Profit is Sanity, but Cash is King.” Alan Miltz
To make revenue, insurance firms must have a large market share which can be achieved by offering superior products and services and settlement matrices.
But what if the product and service offering is the same among competitors?
Operating in a market of competitors with similar offerings leads to commoditization and price reduction. The industry lowers prices, which means lower insurance premiums. With lower premiums, the only way to make profits is by removing inefficiencies and optimizing operations.
Companies have therefore focused on finding the right customer segments (insurance usage, income, and risk levels) for their product offerings and implementing lean processes to save costs. This approach worked for some but cannot be sustained because of external factors impacting the industry such as growing concerns over cash flows.
And now, with the dominance of digital technologies, the focus is also on improving the customer experience. Hence, firms are trying to:
- Bundle products with additional services
- Increase customer touchpoints
- Focus on claims/loss prevention
Let’s look at that last point. Claims prevention is only possible by reducing the chance of an event occurring. This requires assessing the event and connecting the causal factors.
Take health insurance companies. They are a one-stop-shop taking care of personal fitness, doctor/nurse services, and regular checkups. They can also collect data from wearable devices to recommend various wellness services like yoga, gym, and meditation services.
In general insurance, proactive maintenance, and repair can be recommended based on data received from smart devices. For car insurance, imagine if insurance companies recommend it car services, tire or battery changes at the right time, and the insurance premium changes accordingly per car usage, servicing results, and driving pattern?
Alliances and partnerships are key for such an ecosystem to flourish. For example – a hailstorm warning from a weather app is integrated with a custom notification and a proactive coating and repair recommendation listing vendors to contact.
Combining loss prevention measures with insurance offerings is a win-win situation for both customers and insurance firms. Insurance firms can come closer to their customers with multiple interactions throughout the year. Customers get value for the money spent on premiums plus added convenience alerting them to maintenance checks
At Persistent, we are helping insurance firms bring this to life and work towards claim prevention. With Persistent InsurCare, insurance carriers can leverage digital technologies to better engage with their members and reduce the number and severity of claims.
Watch this quick demo video to know more