Why insurance companies should care about this growing trend
It’s sink or swim. Insurance companies must adapt to a new normal and enter the digital, data-driven age where customers can access policy information and conduct business online, without necessarily having to go through a human broker.
But if this news has you worried about the work-and-learn curve that most likely comes with going digital at your insurance company, fret not. Avoiding legacy models and traditional marketing and sales approaches for a direct-to-consumer (DTC or D2C) can be worth its weight in gold, giving you the data you need to better understand your target audiences. They will apply greater transparency to your insurance sales, for a more satisfying customer experience that undoubtedly breeds loyalty and retention.
Across all insurance industries, there’s a rising trend that offers unique and accurate insights to companies looking to sell better: data-driven marketing. To demonstrate that your insurance company’s policies are most relevant to your target audiences, access to data is essential. Data informs you of your customers’ needs, behaviors, concerns, budgets, and other important metrics. Armed with this data and able to analyze it at a deeper level, you can offer personalization as the standard of your offering, which BCG research shows is a key element of trust.
That said, another important aspect of building customer trust is showing them that the data they share with you is secure and used only for its intended purpose. A study found that concerns about sharing personal data online were shared by 83% of consumers, and 72% cited privacy concerns as the reason for stopping a consumer journey altogether.
Collected by the insurance companies themselves, first-party data covers customer information such as customer acquisition data sent, email activity history, web behavior, purchase intent, transaction history, complaints data, etc. This is all information that the insurance company has independently collected (from online quotes, transactions, and marketing campaign activities), analyzed and managed by itself to flexibly execute Optimized marketing campaigns across digital channels, at no additional cost.
Note that while the insights you’ve gained from first-party data can inform almost all of your marketing and sales activities, it’s not without its share of limitations. Customers must provide explicit permission for this data to be used. This is essential to preserve the sense of confidentiality of customer data and ensure transparency at every stage of the process. In most cases, customers are more than willing to share their personal data, as long as they know how its use will benefit them and they are assured that it will not be sold to other entities, which leads to a bombardment of irrelevant data. and unwanted spam.
The benefits of using first party data in a highly competitive insurance landscape are clear. If you want to achieve and maintain profitability while collecting relevant, high-quality data in full compliance with applicable regulations and without breaking the bank or relying heavily on third-party vendors, first-party data is the way to go. Insurance companies looking to break free from the traditional industry environment and gain a competitive edge in the modern age must follow this growing trend while keeping customer needs and concerns front and center.
Written by Yonatan Sharabi, Vice President of Business Development at Kissterra