Insurers and the ‘Chicken and Egg’ Dilemma of Insurance Customer Data Vs Personalization

by | Jun 28, 2021

Insurance Customers Want Value In Exchange For Their Data, But Personalization Of Products Or Pricing Is Not Possible Without In-depth Data

Based on their experiences with retailers, banks and other sectors, insurance customers place increasing value on personalization when it comes to the products, pricing, and communication they receive from their insurer. This expectation goes far beyond being addressed by name or receiving vaguely suitable offers based on broad segmentation.

Insurance customers want relevant products with personalized, usage- or behavior-based pricing; for example, if they drive less, they want to pay less for insurance cover. To achieve this kind of product personalization, the insurer must have access to personal, usage, behavioral, and other types of information in real-time.

On the other hand, consumers are increasingly aware of the risks associated with sharing their personal information and allowing companies to track their product usage or online behavior.

A recent report by Accenture concluded that: “Consumers are being pragmatic and protective with their data. They say they will share data for better value; they show no increased willingness to share data without an incentive.”

This creates a “chicken and egg” type dilemma for insurers. Customers want value in exchange for sharing data, but personalization of products or pricing is not possible without in-depth data. If gathering the required data is challenging because there is no value-based relationship with the customer, and showing value requires personalization which is based on data – where do you start?

Let’s take a deeper look into insurance customer data vs personalization and how building trust is key to solving this dilemma.

Building a relationship based on trust will encourage data sharing

Let’s face it, insurance is a grudge purchase and often leads to a conflicted relationship. Sometimes, the only communication a customer receives, outside of a claims process, is a bill and an annual policy renewal. In the absence of regular communication or valuable information from the insurer, very little goodwill is built up between insurer and customer.

To meet customer’s expectations, insurers must actively work on building trust with their policyholders, and one way to do that is through customer communication management.

Consistent, regular, and relevant communication promotes trust

A customer communications management strategy, enabled by a CCM platform, is the best way to begin building trust with customers.

Insurance customers want to hear from their insurer. They want advice and information that will assist them in managing their personal affairs more efficiently. Whether the communication is marketing or service-based, customers expect it to be highly personalized and relevant to their needs, seamless across channels and consistent in its message.

Investing in a reliable and scalable customer communication management (CCM) solution can achieve this. Not only will it improve the customer experience, but a CCM platform will be central to creating personalized communications that build up trust with the customer.

Once trust is established, the dilemma of needing access to data to personalize products and services falls away, as the customer sees the value of sharing their personal information in every communication they receive.

Building relationships requires customer communication management technology and expertise

Doxim’s experienced consultants and omnichannel CCM platform can support your CCM needs in several ways:

  • Build trust with insurance customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Generate and deliver insurance policies, bills, statements, and any other customer documents via print and digital channels through a single provider.
  • Store documents securely online and enable customers to self-serve.
  • Encourage customers and brokers to adopt digital communication channels.
  • Gather and utilize customer data to continually improve the personalization of communications.

To learn more, read our white paper entitled: Insurers without a customer communication plan are at significant risk.

3. Expansion of digital products

As banking customer behavior shifts, banks must move with the times, or risk getting left behind. Many banks today are exploring the power and potential of open banking, which can allow them to offer more innovative products and services to their customers, as well as to better compete with fintech companies and other non-traditional financial service providers.

As you shift your banking business model to reach new segments or provide an enhanced array of services, communication becomes even more pivotal to your success. After all, if your customers don’t know which new services they qualify for, or how those services will help them meet their goals, then they are unlikely to explore them further. CCM technology can be leveraged here to provide personalized on-statement messaging that directs customers to the right products and services, as well as 1:1 personalized “explainer” videos to help them get started.

Adjusting your bank’s priorities to thrive in 2023

In an era of constant change, the key to successfully transforming your bank’s business model will be to stay attuned to the changing needs and preferences of customers, and to be open to exploring new opportunities and technologies that can help your FI stay competitive and relevant. But these new opportunities are doomed to fail if you do not clearly communicate their benefits and make it simple for customers to access them.

That is why transforming your customer communication strategy is the best first step to broader digital transformation. By updating your approach to communications to meet omnichannel customer needs, you also position your bank to communicate the benefits of changes in your broader organization, like new or enhanced products and services. The pace of change in banking has never been brisker – but with the right strategic approach to these changes, the future is bright.

Investing in a modern customer communication management and engagement platform is an essential part modernizing your banking strategy, as it can provide the personalized digital experiences that will keep your bank or credit union ahead of the competition. It helps provide a great customer experience, and builds rich relationships, which in turn results in customers for life and a competitive advantage in the rapidly evolving financial marketplace.

How Doxim can address the banking customer communications trends identified and help future-proof your digital banking strategy

banking customer communications trends

Doxim’s experienced consultants and omnichannel platform can help transform your customer experience in many ways, including:

  • Gathering and utilizing customer data to continually improve the personalization of communications.
  • Building trust with customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Leveraging interactive video to drive personalized digital customer experiences, such as interactive statements, bills, or reports, that offer visual engagement and real-time interactivity
  • Putting customer data, including customer statements, at the fingertips of your service representatives for immediate and personal service.
  • Making a meaningful connection with value-added content, like information about philanthropic activities, on customer statements.

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