Data and Audience
Customer retention is a major pain point for insurance companies, but empowered data and digital channels make it easier to stay connected.
The supposed common-sense way to grow your insurance company with a quality customer base isn’t to simply attract new ones. In fact, the most important steps in beefing up the portfolio are to prevent attrition and continue to support quality insured policyholders through customer retention marketing tactics. Don’t believe us? The average retention rate for the insurance industry is 84 percent, while insurance has higher customer acquisition costs than any other industry. So It makes financial sense as well: keeping an existing customer is much cheaper than going out and trying to find new ones of similar quality or loyalty.
Customer retention in insurance is all about understanding and predicting the behaviors of policyholders, especially preventing churn for at-risk customers. Successful retention strategies from insurers mean thoughtfully orchestrating personalized campaigns across channels via deep, intelligent consumer insights, connecting behavior-based signals to offers, and delivering a customized experience at the right time with the right message. But creating highly relevant touchpoints and driving meaningful, measurable connections across the entire consumer journey is easier said than done.
The problem is, this is exceptionally difficult in an industry that has usually relied on what’s worked in the past, or tends to lag behind embracing technological progress. A report from PwC showed that the top obstacle for insurance industry growth is the “speed of technological change.” Yet this is the digital age. Insurers need to change or get left behind.
Stay Relevant, Retain Insurance Policyholders
Today’s insurance consumers have unique and diverse needs. Some may be shopping for pure savings; looking for convenient, easy underwriting; or seeking a company with reliable claims service. Others may be active in looking for comprehensive coverage or for consultative services on the best ways to protect their car, home, or other properties.
It’s all different down to the person. The fact of the matter is that there is no longer a one-size-fits-all market, and policyholders will not be engaged unless messages, products, and services are relevant and personal.
Retaining quality policyholders will rest on strategies that improve the customer experience in the following areas:
1. Define the Target Audience
How insurers can respond quickly to changing policyholder needs
Insurers must know when account holders are in the market and either shopping or actively applying with competitors. To get a full picture of the primary retention opportunities, insurers can take existing data and be able to pair that with third-party data to build an overall profile of these audiences.
This can range across any number of potential categories including broad, topline consumer sets; narrowing into high net worth households only; an affinity audience, or something custom in mind. By reaching targeted active shoppers with trigger-based programs or using AI-based behavioral signaling programs to capture shoppers with early intent, insurers will have a window into who to properly target to attempt to keep around.
2. Execute Across Channels
What insurers are doing to educate the customer base
Research by McKinsey found that more than 80 percent of policyholders shop using digital channels at some point in the process. Unfortunately, another study found that 75 percent of people shopping for insurance ran into trouble when purchasing plans online. Consumers want digital options, but they aren’t getting the help they need across the range of preferred channels.
To reach and engage consumers across the reality of the multiple channels where their policyholders are, insurers must reevaluate their relationship to the customer experience. Providing a cohesive and consistent experience, no matter how customers prefer to engage, means insurers will be able to optimize spend to reach the right consumers in exactly the right way.
3. Pushing Personalized Offers
When insurers will share purpose-based messaging
Insurers may be guilty of offering products and services when particular customers or members already have that product or service; even worse is when they don’t even need that product or service in the first place. If there is money spent to communicate with customers there needs to be a relevant impact.
It may sound simplistic, but the same Mckinsey research above found that satisfied customers are 80 percent more likely to renew their current policies than unsatisfied ones. Achieving that satisfaction is the difficult part; not to mention, unsatisfied policyholders cost brands $2.59 billion in the U.S. alone.
But the key to keeping customers around lies in making a connection with personalized, relevant offers and messaging that demonstrate that you know and understand customers. When reaching out to policyholders with any sort of messaging, marketers must use learnings from their data to make sure that it pertains to those audiences specifically.
To reap the benefits of retention, insurers must be able to understand the full market potential of each current policyholder. Once that threshold is met, there need to be strategies in place to continually optimize marketing to connect desired results to actions that drive them. Amsive’s data insights can equip insurers to make informed strategic decisions and demonstrate the full impact of marketing programs.