The Life Health Insurance Angle in Customer Engagement
Digital customer engagement has been a focus for Celent’s insurance practice in 2021 resulting in two new reports titled “Catching up in Life: The Customer Engagement Continuum”, and “Best in Class Digital Insurance”.
The animating question behind our research has been: What does leading-class, end-to-end digital insurance look like today? And how can Insurance companies improve their digital experiences and customer engagement?
To drive the research and discovery, we explored these questions through interviews with five senior Insurance executives who are each responsible for their organization’s innovation and digital experience. As a result, we generated fascinating case studies that form the backbone and narrative of the aforementioned reports.
Our analysis shows that leading‑class digital insurance offerings are achieved by those who focus their entire platform on the delivery of value enabled through digital services and compelling experiences (and by platform we mean the entire organization and its technology capability). This definition certainly sets a high bar—but we wanted to go beyond the typical “single-point use case” to provide an enterprise-level and strategic view.
Before we go any further, there are a few keywords we should explore in the definition of leading class. “Compelling experience” and “value” stand out for me—because, in the end, engagement is about value—and something is engaging if you find the experience so compelling, or it adds so much value, that you make it part of your regular personal or business routine.
Creating a compelling or engaging experience is a tall order for life insurers who for decades have sold products that are purely utilitarian terms, are difficult to buy, and are not really a source of pride or joy once purchased. In short, almost no one really wants to buy life insurance.
As a result, insurers must carefully consider then create value propositions by enlisting digital and automation technologies to deliver that value. We are increasingly seeing two value propositions:
- Pure digital or extreme low-touch models enabled by "full stack digital" platforms
- Models for healthy living, and overall welfare and wellbeing
When we examine pure digital or low-touch models, we see that full-stack digital platforms have cost, speed, and analytic advantages, and are gaining traction where simpler products are offered in highly rate-competitive markets. Key to their strategy is to develop affiliate relationships (and programs) to create networks for digitally reaching, educating, and nurturing the awareness and trust required to create new customers in the pure-digital realm. They excel at digitally-enabled customer reach through affiliations, search optimization, and analytics-based curation and prioritization.
Digital “end to end”; extreme cost-competitive stance.
Pure digital experience
Best-in-class digital acquisition experience with low or no personal touch.
Ecosystem partnerships for distribution and lead generation.
When looking at models for customers’ health and welfare, we see an interesting value proposition emerging from the assumption that Life Insurance companies have a financial interest in their customers’ wellbeing—and in fact, they will have a long-term relationship with them. We see a direct line from these values to a business model that supports the quality of customers’ health and well-being through wearable devices, healthy rewards, and affiliate programs.
|Health and Welfare||
Lifetime value, well-being, and behavior-supported engagement philosophy.
Greenfield and ecosystem partnerships for behavioral engagement and affiliate programs for lifestyle benefits.
Heritage modernization through microservices and APIs to leverage existing assets for better digital experiences and integration.
Finally, irrespective of the value proposition, a key capability required to deliver on the promise of these models rests on an iterative and agile methodology— sometimes referred to as a flywheel model—where devops-like processes and tools increase an organization’s ability to deliver applications and services at high velocity for analytics-informed personalized services. This is key to generating self-sustaining, momentum-building feedback loops required by today’s leading-class capabilities.