Insurance business is changing and this transformation is no ordinary evolution because it is already apparent that the magnitude of change is bigger and the speed, at which the change will move through the industry, will be significantly higher than ever before. It will be a fundamental change, both for insurers and their clients, through which insurance businesses will reach the next level one day.
Today, two polar worlds still exist.
There is the insurance start-up world and its «InsurTech Movement» that promotes Internet of Things, telematics, data analytics as well as robotics, AI and blockchain solutions. On the other side, we have the traditional insurance world which is the existing and predominant reality. In this reality non-digital sales, paper-driven, non-real-time underwriting and manual processes still prevail.
In this traditional insurance world an insurer – especially a life insurer – has a low level of customer engagement, usually limited to engagement at times of sale, renewal or alteration and claim.
This results in the industry’s renowned acquisition, retention and relevance problems with its customers. However, the acknowledgement of these issues presents a great incentive to entertain innovative concepts to generate more customercentricity and in turn, higher customer loyalty and ultimately retention. The lack of customer engagement and positive, regular interactions can be overcome by connecting with clients via sensor devices and similar types of new, widely available, technology.
Furthermore, insurers can use data from these electronic devices that monitor vital signs such as heart rates, activity levels, sleep patterns and others data sets for use in tailored underwriting & pricing purposes. The well-known Vitality program is one of such initiatives, offering to policyholders not only a premium reduction but positive influence on their health and positive daily interactions with their insurer.
There is talk of so-called Lifestyle Insurance programs.
In the new era of hyper connected society which is embracing smart phones, smart homes, smart health, smart mobility (and more) it is just a question of time before we see the uptake of smart insurance in a more wide spread manner.
Providing just insurance coverage is no longer compelling enough.
Instead, customers seek more meaningful value at all times from their insurer. In addition, insurance carriers may help customers live a healthier and more conscious Lifestyle and be rewarded for it. Smart technology will streamline how consumers provide information to insurers and will increase the insurers’ ability to interact with consumers outside of the standard inception, claim and renewal processes.
Lifestyle Insurance is a new and smart way to engage with customers.