Personalization Pays Off: How Auto Insurers Can Exceed Customer Expectations

Nilly Assia
December 1, 2020
4
 min read

Admit it. We all have an appreciation for the level of accessibility, comfort and immediacy that platform economy companies like Netflix, Google, Facebook and Amazon afford us. They offer us personalized products, services and recommendations automatically or at the click of a button, setting the standard for a new level of customer service where our expectations are always being met and exceeded. Indeed, the success of platform economy companies, which, according to Deloitte are “at the heart” of the new economic revolution, is based on their digital strategy and business models aimed at facilitating digital interactions and creating efficient, yet meaningful, touchpoints with consumers.

The same holds true of the insurance industry, where a recent Dynata survey of consumers by MDgo shows that the digitalization and personalization revolutions extend to the world of auto insurance. The survey of one thousand U.S. consumers found that 77% of those consumers believe that insurance providers have a responsibility to leverage technology to improve the customer experience. That means that consumers expect insurance company to align with the nature and scope of services offered in other sectors, such as financial services (think Venmo and PayPal) and consumer goods (like eBay and Amazon), which use their platforms and integrated machine learning technology to pinpoint consumer preferences and offer them recommendations accordingly. So what can personalized services look like for auto insurance companies?

Here are a few ways that auto insurers can leverage technology and digital capabilities to provide policyholders with a personalized experience that meets their needs and exceeds their expectations.

Offer real-time personalized services following an accident

One of the biggest issues that today’s auto insurers face is clear communication of their lifetime value proposition for their customers. The majority of customers choose their carrier based on the price point for the policy as opposed to insurers’ actual value offering and this is because all insurance companies essentially offer the same product under different brand names. This makes it difficult for auto insurers to differentiate themselves and to let their customers know that they are there for them when they need it most.

That said, insurers should be focused on identifying ways that they can improve the level of service and existing touchpoints by offering tailored services according to policyholders’ immediate needs, such as after an accident or fender-bender. According to the Dynata survey, 81% of consumers would find it helpful if an insurer was notified immediately and would direct them to the nearest tow truck or body shop. Imagine if instead of leaving it up to the customer to determine when to report the accident and which body shop they visit, with accident detection and response (ADR) technology, insurers can know exactly what happened to the car, assess the level of repair needed and suggest a number of nearby garages that may already be in their affiliated network. They can deliver this information straight to the policyholder’s phone and already contact the garage to let them know they are on the way. In addition, the insurer can automatically assess the estimated claim costs based on the damage incurred, saving the policyholder the necessary first notice of loss step that is often delayed or even forgotten, and even help them save on those costs in the long run. This option was also strongly supported in the consumer survey, with 78% of respondents declaring that they would prefer if detailed accident information was shared with their insurer to report an accident or during the claims process.

Deliver unique lifesaving value to extend policy lifetime value

With such an opaque value proposition, the auto insurance industry is faced with the need to identify areas where it can provide unique value that will also increase customer retention. Extending customer retention for auto insurance companies really means finding ways to extend the lifetime value of policies as customers tend to switch between providers in search of the cheapest alternative.

Through solutions that identify accidents and assess injuries in real-time, such as those provided by ADR, insurers can receive immediate crash and injury reports for every policyholder, significantly extending the range of services that can be offered. For instance, with MDgo’s advanced ADR sensor, it is possible to immediately contact first responders once an accident has been detected with a specific level of severity, offering customers direct lifesaving value. Through real-time bodily injury analysis made possible with ADR, insurers can provide first responders with information that could help prevent irreversible injuries for their policyholders, enabling them to deliver precise and immediate care.

One concern might be that these reports could violate policyholder privacy – a common claim regarding certain telematics solutions. However, the consumer survey found that 75% would be willing to share vehicle accident information automatically if it could be used for lifesaving efforts. Indeed, 64% of those consumers would be willing to switch auto insurance providers if a carrier had the technologies to help save lives in the event of an accident.

Personalization as the key to monetization?

As noted, the auto insurance is highly commoditized, with many companies struggling to identify their key differentiator. Personalized, digital services such as those made possible with ADR technologies, could help auto insurers hop on the platform economy train, creating new opportunities for monetization of products and services while also improving customer retention over time. This is all about generating multiple value-driven touchpoints that keep customers coming back, while also developing a new ecosystem of unique services that serve as market differentiators.

ADR is one group of solutions that can help auto insurers achieve this by providing visibility into customer expectations, creating space for digital and direct personalization offerings in real-time, giving insurers an opportunity to monetize and reap the benefits of the burgeoning platform economy.

About the Author
Nilly Assia

With more than 20 years of industry experience, Nilly leads the development, execution, and organization of MDgo’s global marketing strategy.

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