‍Why a one-dimensional customer relationship continues to hurt insurances

The tools and technologies available to us today enable a complete transformation of the customer relationship for those insurances ready to fully embrace them. AI and Machine learning solutions allow us to utilize health data collected via wearables and combine them with existing data for new insights. But the biggest change takes place when we aim to achieve complete customer centricity. 

One of my 2023 predictions is that personalization in insurance will take off this year. Customers expect personalization, it directly influences buying behavior and not personalizing customer engagement poses a significant business risk, especially in a low loyalty environment*. Of course, if you’re an insurance, you’re likely already making attempts to personalize the customer relationship. You may have taken full advantage of the explosion in healthtech applications since COVID, with around 350,000 health apps** currently available across app stores. You may have diabetes apps and services for diabetics and heart health programs for cardiac patients. You may have ventured into wellness and preventative services too, with running, nutrition and mental health programs. And through all this you would have greatly enhanced your knowledge of a customer base youthey too often know too little about,

But more often than not, outcomes have fallen short of expectations. 

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‍Insurance customers are multi-dimensional

Part of the problem lies in this: offering pin-point solutions to customers is not really personalization. That’s because each of these pin-point apps sees the user through a one-dimensional lens. The diabetic app may be highly sophisticated, and yet it sees the user only as a diabetic. The nutrition app may address your eating habits based on your eating behavior, but it sees you only as someone who needs better nutrition. But are we only defined by our disease, or by our lifestyle goals and habits? Of course not, reality is much more nuanced. Each diabetic needs to change their eating habits, find the exercise that’s right for them and stick to it. And what if the runner who wants to eat healthier is also unknowingly pre-diabetic? The insurance has no way to find out or engage the customer as what they are: human beings, each on an individual, complex health journey.

How insurances can achieve their customer engagement goals 

If we want to engage customers with multi-dimensional health needs, our approach can’t be based on one-dimensional profiles with only pin-point solutions. This doesn’t just limit the customer relationship and effectiveness of the engagement, it also makes the insurer fall short of the goals they want to achieve. If we want to help customers get healthy, stay healthy, detect diseases early and manage them better;, then we need to use the power of technology available today to create synergies for each customer individually, as the complex human being they are, with multi-faceted health needs. Key elements to this are:
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• Filtering not just for demographic profiles but also for psychographic parameters. We now know that habits and behaviors are as or even more important to our health than our BMI or genetic make-up. If we want to solve for real health impact, we need to engage customers accounting for their behavior and habits on top of demographic and health parameters.
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• A customer centric approach with services and programs personalized to their actual health goals. Customer health goals as a parameter gets too little attention and too little say in designing health programs. If you haven’t been able to convince enough women in their 40s to go to a breast cancer screening through traditional engagement channels, sending a similar message through yet another digital channel or app won’t make a difference. Engagement starts with identifying what the customer wants, then initiating a conversation and empowering her with the tools and knowledge to take charge of her own health - rather than simply being told to do so. Autonomy and empowerment are key.
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• Once you know what your customers need and want, you can bring them the right content and service at the right time. Your digital ecosystem strategy can leverage the wealth of pin-point solutions, strategically targeted at your audience. Too often, this is where insurances start, when it should be the last step.
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Complete customer centricity requires more than the adoption of new tools and technologies - it takes a change in mindset. Those who commit will be rewarded with appreciation and loyalty from their customers, with a healthier customer base and with a wealth of new insights that can have impact across different areas to enable the insurance business of the 21st century.

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*McKinsey

**Iqvia‍

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About the author: Moritz Kaffsack,

Chief Growth Officer at Vivy GmbH since 2021, leading Vivy's global expansion. Deep experience in marketing, growth and scaling businesses to new markets. Active mentor to startups and founders on international go-to-market strategies.