It’s sink or swim. Insurance companies must adapt to a new normal and enter the digital, data-driven age, where customers can access information on policies and close deals online, without necessarily having to go through a human broker.
But if this news has you worried about the work and learning curve that most certainly goes hand-in-hand with taking your insurance company digital, do not fret. Eschewing legacy models and traditional marketing and sales approaches for a direct-to-consumer (DTC or D2C) can be worth its weight in gold, empowering you with the data you need to better understand your target audiences. They will apply greater transparency to your insurance sales, for a more satisfactory customer experience that undoubtedly breeds loyalty and retention.
Across insurance sectors, there is a rising trend that’s lending unique, precise insights to companies looking to sell better: data-driven marketing. To demonstrate that your insurance company’s policies are most relevant to your target audiences, access to data is critical. Data informs you of your customers’ needs, behaviours, concerns, budgets, and other important metrics. Armed with this data and being able to analyze it on a deeper level, you can provide personalization as a standard of your offering, which, according to BCG research, is a key building block of trust.
That said, another important aspect of building customer trust is showing them that the data they share with you is secure and only used for its intended purposes. A study found that concern over sharing personal data online was shared by 83% of consumers, and 72% cited privacy concerns as a reason for halting a consumer journey altogether.
Collected by insurance companies themselves, first-party data spans customer information such as sent customer acquisition data, email activity history, web behaviour, purchase intent, transaction history, claims data, and more. It is all the information that the insurance company has independently collected (from online submissions, transactions, and marketing campaign activities), analyzed, and managed on its own to flexibly execute optimized marketing campaigns across digital channels, without any extra costs.
Note that while the insights you’ve acquired from first-party data can inform nearly all your marketing and sales activities, it’s not without its share of restrictions. Customers must provide explicit permission for this data to be used. This is critical, to preserve customers’ sense of data privacy and ensure transparency every step of the way. In most cases, customers are more than willing to share their personal data, so long as they know how its use will benefit them, and they’re assured that it won’t be sold to other entities, which leads to a bombardment of irrelevant and unwanted spam.
The benefits of using first-party data in a highly competitive insurance landscape are clear. If you want to achieve and maintain profitability while collecting high-quality, relevant data in full compliance with requisite regulations and without breaking the bank or being highly dependent on third-party providers, first-party data is the way to go. Insurance companies looking to break free of the industry’s traditional legacy environment and gain a competitive edge in the modern era must follow this growing trend while keeping customers’ needs and concerns front and center.
Written by Jonathan Sharabi, VP of Corporate Development at Kissterra