Data: insurers’ not-so-new secret weapon?
Almost three-quarters (70%) of insurance consumers would provide personal data in return for lower premiums, according to our survey of more than 1,000 UK consumers.
But how does that actually translate into opportunities for insurers?
The word ‘data’ has entered a strange kind of buzzword territory – we’re all getting tired of hearing about it yet can’t help but appreciate its importance.
And the mood behind phrases like ‘personal data’ has changed. Where collecting it was once deemed somewhat sinister, we know from our research that insurance customers are now ready and willing to give theirs up as long as they get something valuable in return.
And this isn’t just about giving people lower premiums: 53% of consumers would swap their data for more relevant products or services – each one a new opportunity that could provide a whole new lucrative revenue stream for insurers.
Let’s take a look at what some of those opportunities might be…
Breaking from tradition
The insurers that weather the storm of disruption will be those that branch out from traditional products and services. Those that look at the valuable datasets they have and work out how they could use those to offer something unique to their customers.
But what would people be willing to buy from an insurance brand other than, well, insurance?
The findings might surprise you…
More than one-third (36%) of UK consumers would buy energy for their home from their insurer, while 34% would happily buy broadband or home telephone services.
A further 32% would gladly purchase personal data storage from an insurance brand, and 30% would be interested in buying media services.
But it needn’t stop there. Who’s to say an insurer couldn’t offer other services based on the vast pools of customer information they’ve harnessed throughout the years?
The only limiting factors are the ambition and imagination of the insurers who hold that data.
A better customer experience
Another phrase getting dangerously close to buzzword territory, ‘customer experience’ is widely seen as one of the key ways to differentiate your brand in 2016 and beyond.
In fact, 61% of consumers we surveyed said it’s the customer experience that keeps them loyal to a particular insurer.
Think of the most successful consumer brands you know. It’s likely they provide customers with a consistently brilliant experience regardless of when or where the customer interacts with them, or on what device.
But more than that, those brands tend to offer a personalised experience – bespoke products and services that are instantly more appealing than their generic counterparts.
And the only way you can achieve that is through data.
Insurers arguably have some of the most valuable personal datasets in the world. By definition they have to know everything about their customers – finer details many other industries could never get hold of.
This isn’t about being ‘creepy’ with data and putting people off. But if insurers can work out how to turn all that data into personalised offers that make it worthwhile for the customer, they’ll surely be able to provide a better customer experience as a result.
The time to act is now
This is not something to think about doing in future – the opportunities are there right now and ready for the taking.
But more importantly than that: those who don’t step up and take those opportunities risk losing out to niche players or challenger brands.
Almost a quarter (23%) of UK consumers would buy insurance services from consumer tech brands like Google, Amazon or Facebook.
That statistic may not scare you yet – none of those companies currently offer such services. But the fact is they could. And if they did, traditional insurers could be in trouble.
But only if they fail to reap the new data-driven opportunities on offer.
People are willing to engage with their insurers in ways they never did before, and they want a consistent online experience to go with that.
The only question remaining is: which insurers will take the leap and which will be left behind?
Check out our insurance consumer research for lots more industry insight.