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Personal lines P&C insurers face significant competitive pressures as digital communication capabilities change consumer expectations and an influx of data from multiple sources disrupts the industry. Ernst & Young predicts that disruptive change will continue throughout 2016 and beyond as analytics, social media and technology transform the industry and customer expectations evolve. To succeed in this new environment, P&C companies must own the “micro-moment”—the instant in which consumers determine preferences and make buying decisions—and embrace a data-driven marketplace. Insurers who understand the importance of the micro-moment and actively work to automate processes and improve personalization can gain a competitive edge as the industry changes.
With advanced communication technology, P&C insurers can now stay in touch with customers using automated voice, social media and email platforms, creating a personalized experience by using customer data wisely. For instance, if a hurricane threatens an area, the insurer can reach out to customers in that region with a pre-catastrophe notification via preferred channels, and advise on how to protect assets and submit claims.
Up-to-Date Customer Data
This type of proactive communication can generate returns in terms of loss avoidance, and just as importantly, it can strengthen customer relationships. But to put an effective communication strategy in place, the insurance company has to have accurate, up-to-date data on their customers. And that can be a challenge in an industry where data collection usually only happens around transactions.
Too many insurance companies interact with customers only when following up on late payments or processing claims. It’s not uncommon for customers to go years without contacting their insurance company. And most insurance companies don’t proactively reach out to customers to gather data.
A lack of confidence in data quality holds many P&C executives back from implementing a proactive communication strategy. The remedy for that is two-fold: First, P&C companies should put in place a new protocol to update customer information during transactions.
This should not only include verifying addresses, phone numbers and family information, it should also include asking for permission to contact the customer, the collection of social media, email and text data and asking for contact preferences, e.g., finding out whether the customer prefers to receive alerts and other communication via phone, email, text, tweet, etc.
The second part of the data quality improvement project requires effort to scrub existing data and obtain complete information (including social media and SMS data) and customer preferences. The insurer’s in-house team can systematically work its way through the customer database as time allows or hire a third-party vendor to handle it, thus securing up-to-date information more quickly.
With clean data, P&C executives can gain the confidence they need to reach out to policyholders to help them stay safe when natural disasters threaten – keeping customers happy and less likely to jump ship when competition knocks at their door. But a personalized, automated communication strategy offers many other benefits to P&C companies, including the ability to contact customers about evolving coverage needs, address policy lapses or late payments and much more.
Owning the Micro-Moment
P&C executives instinctively understand the value of owning the micro-moment and communicating with customers on the platforms consumers use the most. That’s the way modern companies are building resilient customer relationships. But the first step is to ensure that the company has access to clean data and customer permission and preferences. When that step is complete, P&C companies can help protect customers and become a personalized, proactive presence that earns customer loyalty.
Agree completely insurers must own the micro-moment, but getting to a place where it is possible to go forward with “clean data” is nearly impossible for many insurance companies. Years of M&A activity and incomplete data conversions between systems have resulted in complex data structures, duplicative information/records, and incomplete databases being relied upon for outbound communications (among other things). Achieving a clean data state is harder than it looks in the insurance industry.