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Long gone are the days of Lloyd’s Coffee House, where the risk was assessed and coverage granted based on the best available information, carried indirectly from the high seas. In those days, all available information was conveyed in a matter of minutes over a mug of rum. Relationships were built and maintained through face-to-face interactions and competition was non-existent. Customers were uninformed and without options, so they kept coming back.
An insurer now gathers their data from thousands of sources. Insurance companies engage with and manage millions of customers online rather than dozens of them face-to-face. As a result, the strong relationships of the past have been displaced in favor of sporadic, burdensome written communications. These are often wrapped in a shroud of legalese jargon, leaving the customer unengaged and with little appetite for further interactions.
To make things worse, today’s customers are also very different. They engage with vast amounts of information in real time. They compare offers from different insurers online with little effort and increasingly opt for the cheapest option at any given point in time without understanding the actual value behind the offer.
For insurers, commoditization is already a reality. Last year, Accenture estimated the annual effects of customer churn in the insurance industry at $470 Billion and growing fast. In reality, this was inevitable given the dissonance between the traditional way insurers have been managing their customer interactions and the rapidly changing profile of the customers those insurers are interacting with.
In order to understand how to avoid this growing commoditization, we must first understand today’s customer. Millennials are a diverse group, currently aged 19 – 35. They are a key demographic and also the most challenging one insurers have interacted with in recent history. According to a recent Gallup poll, millennials are the least likely to actively engage with their insurers (31% of respondents) and the most likely to actively disengage from them (27% of respondents).
While many millennials now have families of their own and often defy traditional characterizations of their demographic, there are some key observations that generally hold true and that impact how they interact with insurers:
At Idomoo we have found that personalized videos are a highly effective way to engage with millennials in the insurance space. As it turns out, the “effort” of watching a 60-second personalized video is acceptable even to millennials. This shouldn’t be surprising, as personalized videos tick off virtually all of the above characteristics of this generation: They are engaging videos that are personalized to each and every recipient, reflecting what the insurer already knows about her. They are delivered on demand and in real-time, never burdening her with obsolete or unnecessary information. They deliver a new and engaging experience on any platform and help her relate to her insurer. This relationship is the closest thing today’s insurer can get to Lloyd’s Coffee House, albeit on a far greater scale. This engaging experience makes her feel valued as a customer, while also helping the insurer avoid commoditization.
Metlife reported a 12 point NPS increase as a result of their Policy Renewal personalized video. Zurich reported an 85% renewal rate on theirs (and also won the ICEA Innovation Award for the campaign on the way).
See the video for yourself!
According to Gallup, when a customer is actively engaged, they purchase 22% more insurance products from their primary carrier, stay on as customers 4 years longer, are 3 times more likely to sign up for other financial products and are 4 times more likely to recommend the carrier to an acquaintance. Keeping in mind that 69% of millennials are not actively engaged with their insurer, the potential upside in figuring out how to engage with them is massive. The key to that engagement is to communicate with them on their own terms: using on-demand, real-time, omnichannel, personalized video communications.
In his role as Idomoo’s CMO, Yotam is responsible for supporting the company’s continued growth in its core Enterprise market and for driving its fledgling platform business. Previously, Yotam served as Idomoo’s GM for the Americas, where he built the team and aggressively grew revenues.