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The challenges of the pandemic underscored the life-changing importance of benefits to the workforce. Benefits insurers must be prepared to meet new customer expectations by hyper–personalizing benefits to a more distributed, digitally native, and health-conscious workforce.
Personalization and flexibility in employee benefits has long been an important trend. MetLife’s 2019 Employee Benefit Trends report found that 93 percent of employees said the option to customize their benefits is a “must-have” or “nice-to-have” option.
Post-pandemic, however, carriers must offer hyper–personalized benefits programs. While flexible voluntary benefits and cafeteria plans remain valuable to consumers demanding choice, insurers have an opportunity to improve the customer experience further still with emerging technology like predictive analytics, conversational AI, and human genome sequencing.
Recent research from PwC shows that 41 percent of consumers are likely to switch insurance providers to more digitized alternatives. In contrast, insurers that seize the opportunity to hyper-personalize their digital channels will experience long-term customer retention and satisfaction.
Health Tracking and Behavioral Analytics
Health data, collected from individual plan members, can be used to deliver superior customer experiences and increase profitability. In a survey of over 47,000 consumers in 28 markets, Accenture found that 52 percent of respondents would be open to providing their data in exchange for personalized life insurance policies.
For insurers that integrate data from wearable tech and biometrics devices such as Fitbit, there is a strong opportunity for differentiation. New research from Aite-Novarica Group shows deployment rates for wearable tech among life/annuity insurers remain low, below 5 percent.
Gamification, positive reinforcement, and points systems encourage insureds to develop healthier habits like regular doctor visits and daily exercise. For example, Manulife’s Vitality rewards program enables users to track healthy activities through an app in exchange for rewards and premium discounts. An Ontario man recently became Manulife’s top points earner after committing to running every day since January 2020, citing the app as a primary motivator.
Digital Coaches and Assistants Boost Sun Life’s Sales by 83 Percent
Today, insureds demand better control and understanding of their coverage. The pandemic exposed coverage gaps for millions of workers, who spent more time reviewing their benefits at the end of 2020. Despite this, recent research by Voya Financial shows that two-thirds of American workers want their employer to help them better understand the benefits they enrolled in throughout 2021.
This is an opportunity for insurance carriers to differentiate with an always-on, contextual educational experience in addition to improved digital self-service options.
While a single agent or broker can’t offer personalized advice to thousands of individual insureds with varying needs and levels of knowledge, technology can. Digital assistants and chatbots can answer questions, guide plan members through enrollment, and recommend new products and services based on a plan member’s health and demographic information.
Like human assistants, the best digital assistants are proactive, not reactive. Ella, the name of Sun Life’s AI-enabled “digital coach” first launched in 2018, encourages plan members to take action on important deadlines, cost-savings, and product offerings. These nudges resulted in nearly two million additional interactions from plan members early in the pandemic from January to September 2020. Plan members can also talk to Ella through their preferred channel, including Amazon’s Alexa.
Sun Life’s investment in virtual coaching paid off. Because of Ella’s interventions at the right time to the right user, the company experienced an 83 percent increase in additional coverage purchased than the previous year.
In a pandemic, plan members feel like they’re losing control. One of the smartest things an insurer can do is to give them some of that control back with timely advice, coaching, and personalized support.
Personalized Products and Precision Medicine Begin with Enrollment
The pandemic led to more demand for benefits such as senior care, child care, and mental health services. Accordingly, plan members purchased additional voluntary coverage and many employers expanded their benefits in 2021. While some consumers understand their current options, a major survey from The Hartford indicates that 58 percent of workers would like to see personalized recommendations of benefits they should select.
The hyper-personalized experience must begin with digital enrollment. The same survey from The Hartford also shows 76 percent of employers would be open to sharing basic employee information to inform personalized product recommendations. Health and demographic information can be used to suggest optimal voluntary benefits during enrollment using predictive analytics. Predictive analytics techniques used in tandem with digital assistants can help insurers capitalize on additional upsell and cross-sell techniques.
Some group plans now cover pharmacogenetic testing, which is used to determine an insured’s response to certain medications. It is not the same as genetic testing, which runs the risk of adverse selection (and is likely not even permissible, depending on your jurisdiction). By focusing on pharmacogenetics, carriers can reduce adverse reactions to medication and improve overall health outcomes, reducing total claims payouts. This hyper-personalized approach frees insurers to offer more competitive premiums.
In 2020, a Sanofi survey found that 76 percent of plan members agree that they would allow their physician to get a sample of their DNA (by cheek swab) so that they could prescribe a medication that is most likely to work for them.
Hyper-personalization Is the Future
Today, consumers expect their insurance company to offer the same level of personalization they receive from Netflix. No two Netflix users have the same customer experience. In the future, neither will insurance customers. Most plan members want to see more personalized product recommendations and more personalized assistance to understand their coverage and maximize their benefits plan.
More insurers are using hyper-personalization to deliver the right experience at the right time to the right user. Behavioral analytics, machine learning, and digital assistants are some ways an insurer can scale a personalized experience across thousands of plan members. Insurers that invest in opportunities to hyper-personalize will reduce claims, increase loyalty, and unlock new revenue opportunities.