Compared with industries such as consumer packaged goods, retail, media, and entertainment, insurance companies worldwide have relatively limited direct contact and engagement with their customers. Paying premiums and submitting claims is still the extent of most customers’ interactions with companies after they purchase a policy.
This is changing. Insurers have improved and broadened their digital capabilities in engagement platforms, marketing programs, advisory tools for agents, and more. Our analysis of Asian insurers’ current digital capabilities finds that most have moved past initial investments that enabled them to execute mass campaigns online. The majority have created large grouping segments or customer profiles based on demographics, life stages, or measures of customer value. Many also now offer products with customized messages reflecting the customer’s age, gender, location, and past behavior, such as claims history, vehicle type, and annual miles driven.
Of course, there are risks to marketing personalization. For example, embarking on a program without a robust IT platform and integration capabilities in customer relationship management could tilt results toward sporadic performance. Content or messaging that is excessively or superficially personalized at points of contact can spark negative customer reactions, and irrelevant targeting or offers for customer segments will create the impression of a company with inattentive, undisciplined management.
As the importance of stellar customer service continues to dominate CEO agendas, companies must continue to build their own digital capabilities to gather, analyze, and respond to individual customer data strategically and with precision. These digital capabilities—which we describe as “personalization at scale”—give insurers a better understanding of their customers’ behavior and offer customers advice on products best suited to their needs.
The personalization-at-scale maturity journey
The leading e-commerce companies of today excel at engaging customers individually by codifying their unique profiles through well-integrated digital technology and marketing programs. Winning insurers of the future will excel in similar ways, drawing on their capabilities to mature and master personalization at scale (exhibit). This journey progresses through five levels, from mass campaigns with the same communication to all customers (such as broadcast) through increasingly sophisticated macro- and microsegmentation. Today, the average Asian insurer hovers around level two or three—levers that are focused on increasingly sophisticated macro- and microsegmentation of customers based on their demographics, location, and other characteristics. Levels four and five achieve high-quality one-on-one customer product and service offerings, with the most mature personalization-at-scale efforts benefiting from real-time tailoring of content and messaging based on customer behavior.
Mastering personalization at scale
Based on our experience working with leaders across industries, we’ve identified seven actions for CEOs and other senior leaders of insurers to ascend as they master personalization at scale. A discussion of each action—and how it can help Asian insurers to progress quickly—sheds light on the biggest opportunities.
Use technology to capture more customer data more effectively
Most large insurance companies have basic marketing technologies in place, such as those used to manage pricing and identify individual customers with digital tickets. But they may lack the back-end infrastructure and other capabilities to scale with one-to-one customer interactions. Most insurers in Asia focus on developing one or two critical elements, such as a customer data platform and web analytics, instead of creating a full range of in-house capabilities (the full-stack approach).
They do not have sufficient automation to connect efficiently with larger volumes of customers, which is the definition of “at scale.” Yet several elements of the stack are crucial to running campaigns efficiently at high volumes.
The average large Asian insurer is halfway along the path to achieving personalization at scale, at level three. Companies at this stage can prioritize three actions:
- Measurement and attribution. Attributing critical metrics such as click-through rates and conversion rates to different digital channels and measuring those rates will improve the management of content, landing pages, advertisements, and other aspects of the sales marketing funnel.
- Marketing automation platforms. These technology platforms fully automate the process of marketing planning, content design, campaign launch, and follow-through.
- Design libraries. Tools such as digital-asset managers, landing-page builders, and email editors allow insurers to develop creative elements in real time and dynamically.
Aggregate data to design an easier customer journey
Most Asian insurers are in an early stage of developing their data strategy. They can advance by designing a full complement of technology elements and performance standards for these elements as well as analytics needed to measure progress. Constructing a centralized space as the foundation for data management is extremely important because the space acts as a single source of truth and reduces time to build out models, and multiple systems can access the data. All available customer data—leads, customer, and agent data—need to be captured and consolidated into a centralized space to support a customer’s omnichannel journey. This is particularly true for new leads and data integration.
The average Asian insurer is less advanced in assembling this building block, with digital capabilities limited to separating large groups or corporate profile categories into different segments. The average insurer’s mastery is at level two. To advance to level three, insurers can consider taking action on two fronts:
- Omnichannel breadth and flexibility. A customer data platform that unifies data about an individual customer from multiple sources will create the single source of truth.
- Best-in-class, scalable data platform. Designs for the customer data platform to capture and manage data as the company grows should incorporate data quality checks and features that are precalculated to target customer support objectives.
A customer data platform brings together data about an individual customer from multiple sources to create a single source of truth.
Marshal data to target customers better
Many companies gather data on how to reach out to customers either through agents or directly through corporate teams. Crucial variables for discovery in the data include formats and time of day. While those data often reside somewhere at the corporate level or with external sources, many companies have difficulty leveraging them to improve the customer experience and support sales management teams. Until they overcome this lack of a unified, 360-degree digital view of the customer, companies will struggle to assemble capabilities to further customize customers’ experiences, known as “next best action.”
The average Asian insurer now is offering products with tailored messages for customers based on insights gathered and stored digitally, at level three. Actions in several areas can help companies further advance:
- Next best action. Capabilities focused on prompting customers’ next action require digital systems leaders to apply a suite of analytics models to support customer acquisition, cross-selling, and other sales services. Examples include models that predict a customer’s likelihood of purchase (propensity) and score the quality of sales leads.
- Readability. Additional analytics are developed to interpret results of the models and create dashboards in easy-to-read formats so people in business units can apply the insights in daily interactions with colleagues and customers.
- Mindset shift. Employees and agents applying insights that improve their performance will shift to a mindset of embracing the models for “giving me a good enough direction to act” from expecting “100 percent accurate prediction.” This is key for harvesting positive business results after the employees and agents have adopted the analytical tools to drive conversations.
A leading banking company applied principles of personalization at scale to generate customized product recommendations for every customer. It created an engine for next best actions that integrated output from product propensity models, information extracted from relationship manager notes with natural language programming, and campaign responses gathered from email and text messaging channels. This led to a 90 percent increase in adoption of next best actions by relationship managers.
Break through team silos
Many insurance organizations have yet to develop the teamwork skills necessary to coordinate successful technology initiatives. Different departments often work in silos with limited cross-functional collaboration. Building capabilities for personalization at scale requires strong collaboration, especially among distribution, customer, and technology teams, which are called “agile marketing squads.” The steady progress of agile marketing squads requires rapid testing, allowing for “test and learn” sprints in contrast to time-consuming, costly “big bang” launches.
The average Asian insurer is operating at a level two when it comes to mounting an agile operating model capable of breaking through team silos. To move forward, insurers can consider the following:
- Customer and agent profiling. Insurers capture profile and behavior data of customers and their agents or brokers.
- Omnichannel data insights. By capturing external user data, such as how customers use social media, insurers can supplement internal data residing with sales and marketing and services.
- Agile squads. Members of technology teams and business units, including compliance, work in the same physical or virtual space and collaborate as one team.
- Data-driven collaboration. Insurers build capabilities for storing all customer and agent and broker data, supporting more rapid access and retrieval, and executing ongoing quality assurance and quality control disciplines.
- Iterative testing. Customer testing becomes a regular event in the design and delivery of products and services. This ensures that customer feedback is incorporated into product features.
- ‘Fail fast’ mindset. Team members and employees adopt a “trial and error” mindset vital for continuous improvement and reducing fears of making mistakes. They let go of the idea that they should achieve perfection on their first attempt.
Segment the market to offer simpler, customized products
Many Asian insurers still market excessively complex products with a one-size-fits-all approach. Policies typically combine multiple needs such as protection, savings, and legacy planning. Agents prefer these bundled policies because they provide higher sales incentives and are relatively easy to explain to customers. Moreover, these complex products often contribute the majority of an agent’s commission. Yet customers, especially first-time buyers, can find multiple-needs policies confusing, and deciding on the appropriate plan can be difficult.
Average insurers gather insights from digital data assembled on individual customers in designing policies, which puts them at level three. To advance, they can tailor policies to clients’ specific needs and situations with well-suited value propositions. Action on three fronts can help insurers sustain progress:
- Modular product design. Insurers can combine different coverage, terms, and pricing to generate a nearly unlimited number of packages. These packages can then be tailored to each customer’s needs—such as education, protection, and retirement—as they progress through life.
- ‘On demand’ personalized underwriting. Premiums and pricing can be calculated in real time to reflect an applicant’s current situation and profile rather than defaulting to a predesigned, static pricing table. In life insurance, for example, an extra premium could be offered to a new business applicant who would have been turned away previously due to a preexisting condition or other unmet qualifications.
- Usage-based insurance. Customers would have more options in various coverages to pay premiums based on actual usage. For example, auto insurance premiums could be adjusted partly based on miles driven annually; in life insurance, customers could receive a discount related to their exercise regimen.
For the first phase of its personalization-at-scale transformation, a large company in financial services presented workshops on customer value propositions for employees in every major segment of all key products. The workshops helped identify gaps in offerings and drive consistent communications in each customer segment.
Most Asian insurers have too many touchpoints with intermediaries such as agents, banks, or brokers, putting distance between them and their customers.
Design an easy, seamless customer journey
Most Asian insurers have too many touchpoints with intermediaries such as agents, banks, or brokers, putting distance between them and their customers. These insurers typically do not use a range of digital channels in their marketing, which complicates the ability to orchestrate the customer experience. As a result, insurers often lack a clear understanding of customer behavior and footprints across different channels, a disadvantage that puts average capabilities in creating easy, seamless customer journeys at level two. In contrast, a hybrid of digital communications could provide customers with an easy, seamless journey across those various touchpoints. Insurers can improve their performance in the following areas:
- Integrated intermediary services. In general, an omnichannel experience provides customers with a seamless experience at every contact point, whether within one channel or across multiple channels. Integrating digitally enabled agent or broker services with the insurer’s customer journey improves these transitions from product to product and channel to channel. This is a major differentiating factor for winning insurers.
- Tailored content. Insurers deliver individually tailored content to the customer at every interaction and point of contact. The digitally advanced organization learns in real time from every interaction and responds.
- Customer- and agent-centric design thinking. Understanding the perspectives of customers and agents becomes a principle that insurers apply at each stage of customers’ and agents’ touchpoints with the company.
Make the messages more personal
While insurers are beginning to build capabilities for digital marketing, most still promote mass campaigns over a limited set of channels, such as email, text messages, and push apps, which puts them at level two. They can advance with capacities to make content personal across all platforms. Insurers’ struggles often center on how to analyze their customer base and how to combine proactive outreach and trigger-based campaigns to embed personalized marketing. A major challenge agents face is how to leverage and build upon the insurer’s interactions with customers.
Progress in making marketing campaigns more personal for customers would improve the odds for success in recapturing or retargeting customers. We’ve identified three action areas for insurers to prioritize:
- Personalized content hub. Personalization across all dimensions will include content, copy, images, and formatting.
- Omnichannel-powered digital marketing. The omnichannel experience includes direct digital marketing as well as collaborative marketing with agents, bancassurance partners, and large brokers.
- Retargeting and recapturing. Strong follow-through is established to ensure that “dropouts” during different stages of the marketing funnel are picked up, analyzed, and communicated with digitally or directly.
One large company in financial services was meticulous and expansive in generating insight about its customers. With eight agile teams, it executed more than 1,500 test-and-learn campaigns over nine months.
The technologies and skills involved in personalization at scale can help Asian insurers deepen relationships with existing customers and acquire more customers. As with any transformation, getting started will require a focus on both near-term value creation and longer-term capability building. Insurers that invest in upgrading capabilities across the seven actions to master level five of personalization at scale will position themselves to meet and exceed the expectations of 21st-century customers.