How do we go about hyper-personalisation in the insurance industry?

Insurance companies are facing massive changes in customer requirements in both the private customer sector and the B2B market. They are expected to provide a hyper-personalised service. But how can they achieve this? While data-driven approaches can help, there are alternatives.

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Insurance companies want to transform: they want to move away from just paying out money and are striving to become trusted partners with a real focus on preventative healthcare, with the aim to also increase the number of positive customer interactions. One possible approach here is hyper-personalisation, which involves producing dynamic, tailored, individual quotes for every customer in both B2C and B2B settings. But how does this kind of hyper-personalisation work?

Data-driven personalisation

Data from customers can be used as the basis for hyper-personalisation, as all the areas of life relevant to insurance, from transport and health through to living arrangements, are now linked together digitally, with lots of potential data sources available. A range of different use cases could be possible: for example, intelligent travel insurance could automatically connect to a car’s GPS and detect when the driver is abroad. This could be called a ‘perfect-fit’ insurance, where the policyholder’s individual requirements are insured automatically at all times.

Quotations like this require an open IT landscape with interfaces and a data-driven culture and strategy in the company. Of course, the customer needs to be willing to share specific data with the insurance company and with external partners in the ecosystem. The idea is to persuade customers by being transparent in communicating the ‘data for value’ model, so they see it as sharing their data in exchange for more individual services. Experience shows that customers are more reluctant to share data in some areas than others, with health being a good example.

Non-data-driven personalisation

Alternatively, there are more traditional approaches to personalisation which are not primarily data-driven. For example, customers who are already insured in one area (e.g. household) but claim in an area which is not covered (e.g. travel insurance) could be given a quotation for post-claim insurance. The counter-benefits here could include a longer contract with the insurance company or taking part in a future product test.

Clear trend

There is a clear trend in the insurance industry towards hyper-personalisation, with real potential in data-driven approaches. But there are alternatives in segments where customers are reluctant to share more data with their insurers. Personalisation is also linked to other trends in the industry, from embedded insurance to ecosystems. However, it is clear that insurance companies will be forced to make more investments in technology, company culture and strategy.

Contact person for Switzerland

Markus Reding

Managing Director Insurance Switzerland & Partner

Markus Reding leads the Market Unit Insurance at Zühlke in Switzerland. For more than 20 years he is responsible for innovation, strategy, product management, software engineering, and business development in various leadership positions and has practical experience from numerous digitisation projects. Meeting the challenges and market trends in the insurance industry with innovative solutions is what drives him.

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