Page 44 - The Insurance Times October 2024

InsurTech Series

The Why and

How of Hyper-

personalization in

Insurance Ritesh Varma

A case study by McKinsey predicted 5-15% increase in revenue and 10-30% increase in marketing-
spend efficiency through personalized product recommendations. Another study reported that 78%
of insurance executives believe personalized service based on real-time data analytics will be a
crucial differentiator in the industry.

Overview Making the best efforts possible to create personalized
experiences for end users, along with end-to-end digital
A case study by McKinsey predicted 5-15% increase in
revenue and 10-30% increase in marketing-spend efficiency journeys, is a logical necessity for insurance companies. Here
through personalized product recommendations. Another are factors that support this deduction:
study reported that 78% of insurance executives believe Competition is increasing for insurers as regulations
personalized service based on real-time data analytics will ease and markets open up
be a crucial differentiator in the industry. Digital awareness and demand for omnichannel
experiences is rising, and insurers can't shy away from
These numbers are driven by the two trends that technology
characterize today's consumers - personalized services and Quality and speed of service are gaining relevance as
instant gratification. Every customer is unique and expects critical differentiators
service providers to understand and cater to their specific
needs. They will prefer service providers who resolve issues Customers are becoming more aware of options, and
and settle claims within hours. Insurers will benefit from making informed decisions based on overall service
developing attention to detail and taking actions based on effectiveness
predictive insights.
Customer-centricity and Beyond

Let's explore why insurance companies globally must shift gears, Insurance customers not only buy immediate risk coverage,
and the technologies that will give them the greatest thrust. rather they look for value across their journey. Hence, insurers
must adopt technologies and create strategies that boost
Logical to be Technological - The need the value delivered throughout the customer lifetime.
for personalization GenAI can prove to be the perfect genie and change not
Insurance is making a paradigm shift from 'indemnity' to 'well- just the way solutions and services are developed, but also
being'. Buying an insurance policy is a long process, during how companies interact with customers. As stated in an
which people compare the track record of companies and August 2023 BCG interview, tools such as GenAI-powered
gauge the additional benefits, time taken to settle claims and sentiment analyzers have the potential to greatly enhance
quality of communications. Once they start their journey with customer service, and 40% to 60% savings are expected from
an insurer, they expect a long-term and positive relation. productivity gains in customer service.

40 October 2024 The Insurance Times