Using data to serve, not just assess, insurance policy holders

What does "customer delight" mean to you?

Fri Dec 08 10:47:00 EST 2017

I’ve been in the customer experience space since before people called it that. So, it’s interesting to see how the debate on “customer delight” has changed over the years. In the beginning, it was all about trying to do the unexpected (a.k.a. add new value), but most of today’s client experience authorities will say that’s missing the mark, as it doesn’t impact long-term client loyalty.

With the recent spate of weather-related events in the Americas, I can’t help thinking if this is true of the insurance industry. While nowhere near as devastating as the hurricanes and ensuing floods in Puerto Rico, Florida or Texas, a minor storm in the Northeast United States caused a bit of damage to my home this past weekend.

Out of nowhere, a gust of wind lifted my very heavy and large patio umbrella off its base and out of the table, hurling it against the side of my house! Yes, my weather app said there was rain in the area but never suggested anything that could damage property or injure anyone. The umbrella broke in a few places but when it hit the house, it slammed into a sliding door and transom window that could have been damaged to the tune of several thousand dollars.

As I thought about my experience and reflected on all the variables- what else could have gone wrong, what I could have done differently -- my thoughts came back to the alerts I get from my insurance provider. I’m warned when my payment will be deducted on my automatically paid premium, presumably so I can ensure that the check won’t bounce and they don’t incur additional expense: why else would they remind me about a payment I scheduled that is the same every month and that is withdrawn on roughly the same day?

In the age when Google has figured out where I live and work – and when they occur -- based on my dwell time, knows the routes I travel and where I am at any given moment, shouldn’t my insurance company know this too? Insurers certainly know where my house is, and because I live and work in a suburban area, they can infer my car is with me during the day.  They know the perils that I could face - they use data on crime and severe weather potential to rate my policy!

If they wanted to “delight” me, they’d use this information to help me prepare for possible catastrophic events and most likely avert claims against my policy. If I’m at work and an event is potentially impacting my home, wouldn’t a warning be helpful so I could alert other family members?  And what about those family members?  They’re on my policy and could possibly face issues themselves when they are driving around.

I don’t want to come across as paranoid, but some capability to use my location and the vast amounts of data that a well-run insurance company has, plus the ability for me to set personal preferences in their app, would not only provide more value but likely reduce their costs by reducing claims.

On top of all this, we know our rates often go up when we make a claim. Many insurers make claims management easier using mobile apps and some provide very important help to first time claimants such as my child, who may experience an automobile accident and not know what to do. Regretfully, at that point, the damage is done… literally. What if they again used their vast resources and data to help me mitigate accidents before they occur?

Communicating about icy roads, construction or notoriously dangerous roads and intersections could keep me safer and lower claims rates. And when my rates do increase because of a claim, perhaps I’d be less quick to shop for a new provider because I’d realize they did what they could to prevent the situation. Should insurers delight their clients by leveraging available technology and data to reduce overall policy risk? It doesn’t take a lot of actuarial calculations to prove that it will reduce claims and customer churn, and that it’s just good business.

Actuaries in 24 of the top 25 insurance companies rely on Pitney Bowes data for increasing pricing accuracy: Customer experience and digital transformation professionals should take a closer look.