Good Policy: Personalization Drives Customer Acquisition and Retention for Insurers

Property, Casualty & Life Insurance
The Personalization Revolution:
Policyholder Acquisition & Retention
in a Digital World
June 10, 2014
COPYRIGHT ©.2014. ALL RIGHTS PROTECTED AND RESERVED.

2
Today’s Speakers
COPYRIGHT ©.2014. ALL RIGHTS PROTECTED AND RESERVED
Elizabeth Glagowski
Editor-in-Chief
Customer Strategist Journal
Jonathan Gray
SVP of Marketing
Revana
Weston McDonald
Head of Financial Services
TeleTech

3
Event logistics
Please turn off your pop-up blocker
 You will not be able to participate in today’s survey
Download a PDF of today’s slides
 Click the green resource widget
Have a question for the presenters?
 Click the red Q&A widget
Helpful tools
 Click the gold question mark for help with technical issues
 Enlarge slides when needed
 Twitter: @CustStratEditor #customerstrategy

4
Agenda
 Compete on personalization
 6 pillars of customer acquisition
 5 pillars of customer retention
 Q&A

5
Compete on personalization

6
Our always on, digital world is transforming the
insurance industry with a particular impact on
customer acquisition and retention
In an always-on, 24X7 multichannel world characterized by complex
customer segmentation, delivering value has become more complicated
 Limited economic growth in
developed countries
 Strong competitive
pricing
 Consumers are
ubiquitously
connected
Source: OVUM “2014 Trend to Watch: Insurance”; Ernst and Young, IBM Digital Insurance 2013, Ovum
“Creating an Insurance Customer Experience Management Strategy”
 Rise of online and digital channels
empowering consumers
 Customer experience is
basis of competition
 Individual-centered
economy
for insurers.

7
It’s a battlefield to acquire and retain
customers, and customer experience is rapidly
becoming a fundamental differentiator
• Trust in the financial services industry is the
lowest of any industry at 44%
• Only 30% report having positive customer
experiences with their insurers
• 40% of consumers are likely to switch to
another automobile or home insurance
provider
• 35% are likely to take out a new contract
with a new provider
• 25% of customers are likely to cancel an
existing contract
Source: KPMG, World Insurance Report 2013, Accenture 2014, Forrester Research 2012, Ernst and Young
Global Consumer Insurance Survey 2012, Insure.com 2013 Customer Satisfaction Report

8
With the right customer experience, insurers
can increase the rate of acquisition and
reduce churn of policyholders
70% of buying experiences are
based on how the customer feels
they are treated after they become
a customer
Source: McKinsey; RightNow Customer Experience Impact Report
89% of consumers have
stopped doing business with a
company after experiencing poor
customer service.
A positive customer experience influences purchase decisions and
minimizes customers switching to competitors

9
Personalization is the key to enhancing the
customer experience, thereby driving both
acquisition and retention
Source: Ernst and Young 2013, Gartner 2014: “Personalize the Customer Experience to Boost Satisfaction,
Loyalty, Advocacy and Profit”, SAS
• Policyholders of all ages
prefer personal interaction
when purchasing from
insurers
• A personalized customer
experience can increase
policyholder conversion by
up to 20%
• By 2018, companies that
have fully vested in all types
of online personalization will
outsell those that have not
by more than 30%

10
6 pillars of customer acquisition

11
Acquisition is particularly challenging in the insurance
industry because advertising encourages consumers
to shop around
Insurers need to understand when the individual’s need arises and be there at the
right time with the relevant offer to capture the opportunity.
• 55% of current marketing spend is
on new customer acquisition*
• Policyholder acquisition is
triggered by an individual’s
specific need, not seasons or
economic trends*
• Insurance advertising has become
a daily part of our lives because
insurers don’t know exactly when
individuals will need a policy
Source: McKinsey; Bain 2013

12
Potential new policyholders are using multiple
channels to research and understand their
insurance options
38%
N/A
Linking policyholders’ interaction points to sales drives customer acquisition
Source: IBM Insurance Interaction Points 2013
Life Insurance P&C Insurance
Top U.S. interaction points
for searching
Top U.S. interaction points for
purchase
Personal contact
independent
agent
Personal contact
tied agent
People I know
personally
Insurer website
Aggregator
54%
45%
48%
47%
47%
48%
38%
47%
38%
31%
22%
31%
33%
16%
24%
6%
8%

13
Personal interaction and customer advocacy are more
important than price when acquiring new customers
Enrollment Drivers
What drives policyholders to
purchase?
Personal Interaction
High in customer advocacy
Low in customer advocacy
High future
purchase
consideration
Low future
purchase
consideration
Source: Accenture 2014,
Forrester February 2012,
Ernst and Young 2013,
KBM Media Research July
2013, Forrester “Customer
Advocacy 2013: How US
Consumers Rate their
Financial Service Firms”
58%
82%
41%
Price
Personalized Services
USAA and Amica
have customer-centric
strategies
and put their
customers first in
everything they do,
from claims handling
to renewals and
communications

14
To successfully acquire new policyholders, insurers must
deliver an integrated and personalized experience
across six key pillars
1. Personalized Search
Experience
2. Attribute Based
Routing
3. Custom Call
Scripting
4. Technology
Platform
5. Policyholder
Outreach
6. Analytics
Platform

15
With most prospective new policyholders beginning their
search online, ‘personalizing’ the initial contact is critical
 Not having to repeat information
already given
 Unique landing pages
 Device specific
 Early customer segmentation

16
With most prospective new policyholders beginning their
search online, ‘personalizing’ the initial contact is critical
• Understands prospective policyholder
location and garage share during
search
• Offers discounts on policies relevant to
policyholder’s search
• Customizes the online search results

17
Leveraging attribute based routing enables the potential
policyholder to speak with the right person with the right
skills to help convert them to a new policyholder
 Intelligently connecting insurance
teams that most closely match the
customer profile for sales discussion
 Skills-based call routing
 Temporal 800 number is unique to
specific policyholder’s online
search history

18
Leveraging attribute based routing enables the potential
policyholder to speak with the right person with the right
skills to help convert them to a new policyholder
• Uses text analytics to assess
policyholders’ social media comments
and tweets
• Routes customer claims to the
appropriate department for a prompt
resolution

19
Custom call scripting can be utilized to align to specific
customer inquires and search history for both inbound
and outbound calls
 Build custom scripts for inbound
calls
 Match agent’s call script to
customer’s online search history
 Develop content for targeted
outbound calls

20
Custom call scripting can be utilized to align to specific
customer inquires and search history for both inbound
and outbound calls
• Organizes, stores, and analyzes call center
data from agent surveys
• Identifies policyholder questions being
answered incorrectly
• Updates answers immediately

21
An integrated technology platform manages the
multiple channels policyholders use to search and
purchase new policies
 Integrated technology platform
remembers who the policyholder is
and their preferences
 Connects the policyholder’s claim
history to the call to manage the
experience

22
An integrated technology platform manages the
multiple channels policyholders use to search and
purchase new policies
• Links customer’s mobile quotation app to a mobile
voice assistant
• Integrates mobile app with technology platform
• Personalizes the search experience
• Addresses registered policyholder by name
• Stands ready to lend a hand

23
Targeted, relevant, and proactive policyholder outreach
delivers increasingly personalized interactions
 Care Services team to proactively
onboard policyholders
 Care Services manages outbound
communications to policyholders
who have submitted claims and
inquired about new policies or
offers

24
Targeted, relevant, and proactive policyholder outreach
delivers increasingly personalized interactions
• Uses proactive chat invitations on website
• Decreases abandonment rates
• Increases customer satisfaction
• Adds significant revenue from specialty
insurance customers

25
When insurers have a deep understanding of their target
policyholder segments, they can more effectively
manage personal interactions to drive acquisition
 Knows when and what to communicate
 Predicts when a customer
might churn
 Optimizes offers based on search history
 Identifies when shoppers are ready for
outbound calls

26
When insurers have a deep understanding of their target
policyholder segments, they can more effectively
manage personal interactions to drive acquisition
Leading
Insurance
Company
• Conducts advanced direct marketing
testing
• Uses analytics to test and define different
audience segments
• Creates detailed profiles for each
customer segment

27
Unlock the value of “personalization” to drive
significant improvements in acquisition
Personal
interaction
drives 82% of
policyholder’s
purchasing
decision
1. Personalized Search Experience
2. Attribute Based Routing
3. Customer Call Scripting
4. Technology Platform
5. Policyholder Outreach
6. Analytics Platform

28
Poll question
Which of the 6 pillars is the biggest opportunity for
improvement at your company?
1. Personalized search experience
2. Attribute-based routing
3. Custom call scripting
4. Technology platform
5. Policyholder outreach
6. Analytics platform

29
5 pillars of customer retention

30
Customers have lots of choice in insurers and
are transient
The cost of acquiring
new customers can be
up to 10 times the cost of
retaining existing ones
Even a small increase
in retention rates can
add millions of dollars
to premium revenue
for insurers
Source: SAS

31
Personalized services and proactive outreach
are two key factors that influence retention
Proactive Outreach
44%
43%
Trust
Relevancy
Source: Accenture 2014, Forrester February 2012, Ernst and Young 2013, KBM Media Research July 2013
Attrition Drivers
What drives policyholders to
switch?
87%
80%
42%
23%
Retention Drivers
What drives policyholders to renew?
42%
35%
62%
Confidence in Relationship
Better Offer
Lower Price
Lack of Personalized Services
Lack of Fair Handling of Claims
Lack of Feeling Valued
95%
Policy Bundling

32
Insurers that focus on policyholder
engagement see better retention results
95% retention rate
when policyholders
bundle
their homeowner and
auto policies with the
same insurer
Source: 1to1 Media and KBM 2013
Policyholders are more
likely to consolidate
and purchase all of their existing
insurance policies when
engagement is high
Policyholders are
less likely to shop
around when
engagement is high
Shop around when it is time to
renew your insurance policy
Consolidate and purchase all
policies from insurer
4.0
4.9
5.7
Weak Moderate Strong
3.5
Purchase additional insurance
4.4
products
5.6
5.4 5.6
6.9
5.8
4.9
3.2

33
And customer advocacy is high when customers are
engaged with their insurance providers
Recommend
Recommend an insurer to a
friend or colleague
4.4
4.8
6.6
8.2 8.4
6.6
Source: Forrester “Customer Advocacy 2013: How US Consumers Rate their Financial
Service Firms”
Defend
Defend insurers when others make
unfavorable comments about it
3.8 3.6
5.3
7.0 7.1
5.0

34
An integrated approach is necessary to retain
existing policyholders and reduce churn
1. Know
the Policyholder
2. Proactive
Outreach
3. Handle Claims Fairly
4. Provide Relevant
Offers
5. Value
Policyholders

35
With 80% of a policyholder’s decision to switch
determined by lack of personalized services, insurers must
know their policyholders
 Moments of Truth Journey Map - Knowing key
events that drive need for personalized
touchpoints:
• First Notice of Loss
• Price Increase
• Claims/Renewal Notification
• Product Inquiry and Offer up-sell/cross-sell
 Know the customer persona – e.g., his or her
sales and communication preferences
 Keeping in touch with their life events and
customer episodes

36
With 80% of a policyholder’s decision to switch
determined by lack of personalized services, Insurers must
know their policyholders
• Conducted data asset inventory
• Created a set of “life stage” based target
segments
• Created detailed profiles for each customer
segment
• Customized segment messaging
• Optimized direct marketing program’s
effectiveness
Leading
Insurance
Company

37
Almost 62% of policyholders are more likely
to renew when they receive proactive outreach
 Predictive Analytics
 Churn Model
 Response likelihood (propensity and channel)
 Offer Optimization (LTV)
 Lean Process Design
 Triggering communication in key processes
 Send tailored messages
 Post-interaction customer care surveys

38
Almost 62% of policyholders are more likely
to renew when they receive proactive outreach
• Uses an automated system to improve
customer interactions
• Sends outbound messages to customers
who may be affected by adverse
weather conditions in specific regions

Since 42% of policyholders switch when claims are handled
unfairly, those Insurers who handle claims well are more
likely to see retention increase
39
 First Contact Resolution
 Technology to power outcomes
 Attribute routing
 Associate Empowerment
 Segment-based associate training
 Providing Intelligent Web Self Help

Since 42% of policyholders switch when claims are handled
unfairly, those Insurers who handle claims well are more
likely to see retention increase
40
• Collects and analyzes customer data
from social media, email, phone
• Assesses urgency and immediate
damage
• Deploys first responders in times of crisis
• Resolves problems in a timely fashion

41
With 43% of a policyholder’s decision to renew based on
relevant offers, insurers need to engage their policyholders
with the right offer at the right time
 Communicate to policyholders according to
persona
 Optimizes offers based on customer LTV and
sensitivity
 Technology-Driven, Personalized Treatment Plan
 Intelligent routing/connections
 Custom engagement scripts
 Retargeting ads to reengage customers
 Single data environment

42
With 43% of a policyholder’s decision to renew based on
relevant offers, insurers need to engage their policyholders
with the right offer at the right time
Leading
Insurance
Company
• Creates detailed profiles for each
customer segment
• Customizes product offers and benefit
statements messages accordingly

43
When policyholders feel valued
by their insurance providers, they are less likely to switch
 Associates who are advisors and
advocates
 Acting in the customers’ best interest
 Professional treatment and recognition
 Loyalty programs
 Proactive decisions to make it right
 Intelligently connecting the customer to
right resource the first time
 Making contact and engagement easy

44
When policyholders feel valued
by their insurance providers, they are less likely to switch
• Suspended premium charges when
soldier customers were overseas
• Proactively sent out unsolicited refund
checks to soldier- customers

45
Delivering a personalized Policyholder Experience will drive
significant improvements in retention and reduce churn
5. Values
Policyholders
1. Know the
Policyholder
“Personalization”
2. Proactive
Outreach
3. Handles Claims
Fairly
4. Provides
Relevant Offers
An integrated approach to personalization will significantly mitigate the
risk of policyholders switching providers

46
Poll question
Which of the 5 key pillars is the biggest opportunity
for improvement at your company?
1. Know the customer
2. Proactive outreach
3. Handles claims fairly
4. Provides relevant offers
5. Values policyholders

47
Tackling the “Personalization Revolution”
demands a proven methodology to deliver value
Assess Design Deliver Optimize
►Design
acquisition &
retention
processes
►Create
differentiated
treatment
strategies by
customer
segment
►Create
roadmap
for execution
► Roll-out live
testing
►Develop
reports
►Complete
recruiting and
hiring
►Complete
training
►Go live
► Daily
management
aligned with
best practices
► Refine
execution
► Test and
measure
strategies and
processes
►Recalibrate
teams and
solution
as required
► Identify
improvement
opportunities
►Determine
lifetime value
of various
customer
segments to
determine
acquisition
and retention
priorities
►Define
desired
customer
experience
Workshop
►Gather
information
about what
the client is
selling
►Understand
the audience,
market
dynamics, &
competitive
situation
►Understand
the value
proposition

48
Getting started:
Acquisition & Retention workshop
TeleTech will present a 2-day workshop with organization stakeholders designed to
understand the current environment with respect to the 6 acquisition pillars and 5
retention pillars. The discovery session will:
• Demonstrate the value of customer experience and the role of the acquisition and
retention pillars to key organizational stakeholders
• Help TeleTech understand the opportunities for improvement across the 6 acquisition
and 5 retention pillars
• Identify barriers to success, resources available and context with regards to strategic
priorities
• Collaborate to identify potential next steps to impact the acquisition and retention pillars
and – ultimately – build competitive advantage
Deliverables and Expected Outcomes:
Acquisition
• Current State Assessment & Initial Uplift
Forecast
• Sales Strengths & Weaknesses Analysis
• Operational Gap Analysis by Channel
• Sales Optimization Prioritization Plan
• Definition of potential next steps to move
the needle on the 6 acquisition pillars
TeleTech charges a $20,000 fee for this workshop
Retention
• Deeper understanding of imperative for
knowing the policyholder
• Report Out on the current state of the retention
pillars across the enterprise and potential
opportunities
• Definition of potential next steps to move the
needle on the 5 retention pillars

49
Q&A Session
Elizabeth Glagowski
Editor-in-Chief
Customer Strategist Journal
Jonathan Gray
SVP of Marketing
Revana
Weston McDonald
Head of Financial Services
TeleTech

Good Policy: Personalization Drives Customer Acquisition and Retention for Insurers

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Good Policy: Personalization Drives Customer Acquisition and Retention for Insurers

Similar to Good Policy: Personalization Drives Customer Acquisition and Retention for Insurers (20)

Recently uploaded

Recently uploaded (20)

Good Policy: Personalization Drives Customer Acquisition and Retention for Insurers

Editor's Notes