In an increasingly competitive insurance industry, lifestyle apps are proving to be real game-changers, says SilverBridge’s Nelson Camara.
Customer engagement is a priority for any business. In the insurance sector, organisations have also come under immense competitive pressure from competitors and insurtechs, who are seen to be more agile and innovative. Fortunately, the increasing popularity of lifestyle apps offers insurers an opportunity to drive engagement.
According to PwC, insurance cover has become increasingly commoditised. This has resulted in people basing their purchasing decisions mainly on price and less on reputation. It also means customers are less brand loyal than at any time in the past. Because it has become so easy to move from one provider to another, the ‘stickiness’ of a customer remains a challenge for any insurer. Those non-life insurers unable to maintain a steady rate of innovation will find it difficult to meet ever-changing customer expectations.
So, if insurers are measured predominantly on price, what else can they do to give more perceived value to their customer base? This is where digital technologies come in. In the PwC survey, half of the respondents said they would be prepared to provide their insurer with more personal and lifestyle information to enable them to get the best deal for relevant services on their behalf.
Accenture argues that even though digital consumers are seen to be more demanding than their predecessors, the reality is that they simply expect insurers to keep pace with their connected lifestyle. Every business targets the next-generation of consumers to maintain profitability. It just so happens that this means digital must become the mechanism to do so effectively in the information-rich environment.
“Every business targets the next-generation of consumers to maintain profitability. It just so happens that this means digital must become the mechanism to do so effectively in the information-rich environment.” – Nelson Camara, SilverBridge.
And because data is the currency of this digital era, insurers will move towards the creation of a more omni-channel customer experience. Customers want a seamless experience across all channels and devices. The omni-channel approach is the key towards this.
Digital consumers are more likely to stay with the brands and service providers that understand them and offer them choices relevant to them as individuals. What better way to gather this information and insights than to use a lifestyle app. Unlike a traditional insurance app that maybe only provides information on premium changes or can capture information when there is a claim, a lifestyle-focused one generates interest on an almost daily basis.
An app life
On the one hand, these apps provide users with any host of features that can include a ‘gamified’ experience, targeting life events such as buying a house or new car and even rewarding good driver behaviour. Other examples include incentivising customers who take part in healthy activities like going to the gym and competing in cycling and running events, with either rewards or reductions in premiums. For the insurer, the data that gets generated becomes a veritable treasure trove of insights. Insights that can be used to create a more tailored product offering to the customer.
Highly personalised products and premiums build brand loyalty and reduce churn as customers are likely to stay with a provider that understands them. An insurer must, therefore, be willing to experiment with a lifestyle app that is able to grow organically with its features. These ongoing enhancements should be done in accordance with customer feedback and the insight derived from the app itself.
Digital engagement is a vital area of focus for insurers. Providers are learning to effectively embrace it and use the insights gained to add value for customers.