Loyalty Strategies for Digital Insurers in USA

The economy of the U.S.A. is currently in the grips of an economic crisis the likes of which we haven’t seen before. Unlike its predecessors, this one sits amidst multiple realities: those experiencing unprecedented growth and those dealing with a significant downturn. One common theme that should be of concern to consumer-facing businesses would be the rising inflation in personal consumption expenditure (PCE).

The insurance industry is bound to bear the brunt of this as wallets are tightening and discretionary expenditures (even insurance) are on a downward trend.

With so many areas of friction for the end consumer, what are the loyalty strategies for digital insurers in USA to correct the double whammy of rising costs and dipping revenues? Technology and better customer experience could be the way.

Unlocking delightful experiences

The shock of depersonalization, coupled with rising expectations of convenience vis-a-vis mobile applications means that the only candidate for bringing about differentiation is customer experience (CX). CX can be improved in many ways. Lets look at how companies are using technology to inspire loyalty amongst their customers:

1. Mobile-First User Experience

Smartphones have become commoditized to the point where most online interactions, especially among the younger generation, are mediated through mobile browsers. Keeping this in mind, insurance companies will need to revamp their digital strategies to ensure it’s mobile-focused.

2. Smart Automation

Insurance involves a lot of paperwork, signatures, and general monotony that stresses both customers and employees. Leveraging rudimentary AI-powered chatbots and automation tools would allow employees to focus on more meaningful tasks and customers to resolve their queries without having to wait for a service agent to pick up their call.

Inspiring Loyalty

Any insurance company wishing to earn their customers’ loyalty should understand two things: it’s easier to retain an existing customer than to acquire a new one, and loyalty is ultimately a function of the customer’s experience with the entire brand. Treating these tenets as the gospel would be enough to nudge your company in the right direction.

Here are a few things that will help improve your customers’ perception of your brand:

1. Data-driven personalization

All companies, especially in the BFSI sector are sitting on a treasure trove of customer data that they never use. The truth is, this kind of personalization cannot be fully automated and would need close collaboration between man and machine to truly deliver. Having a comprehensive database in place would allow customer service reps to look at individual family profiles and then come up with policy nudges that benefit the customer (like adding a child who came of age in the car insurance policy).

2. Usage-based Pricing

In the current economic climate, there is nothing that insurance customers would appreciate more than a company that actively encourages customers to only pay for what they use. Such pricing models would signal to customers that the company actively cares for its customers and is willing to implement pricing methods that make insurance lighter on customers’ wallets.

Experimentation pays

Lemonade, the InsurTech startup pioneered the model of online first insurance delivery and completely eliminated brokers, and chose to become a carrier itself. Doing this allowed it to offer competitive insurance rates, while also becoming a staple in the technology stack of millennials in the U.S.A.

Lemonade operates entirely via mobile applications and takes full advantage of its data reserves and artificial intelligence to automate claim verification, fraud detection, and all other cumbersome vetting processes to make the insurance delivery process super smooth.

It’s no wonder that it’s become a billion-dollar company in less than 10 years of its launch.

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