How mass personalization helps insurers win

Looked at from a marketing lens, my personal truth is that I am a demographic of one. And anyone who can grasp that and understands my needs and preferences will score some serious points and wallet share. This type of mass personalization could be key to successful insurance small case marketing on Main Street.

The concept of mass personalization is enjoying tremendous success with tech-savvy retailers selling wine, clothes and even bacon over the internet. I know because I buy all three. The way they work is each company gets to know and understand you as an individual. Either by answering some of their questions, providing your measurements and/or speaking to your “personal” representative.

Then, somewhere, somehow, this personal information is stored and some algorithms are used when they put together a monthly offer or a real-time offer which is tailored specifically to my interests. My offer appears, I accept it, and it arrives in the mail. I don’t even notice the payment. All I notice is my mass personalized products. So why is the concept of mass personalization within insurance non-existent?  There are several reasons and the most prominent for this discussion is legacy technology.

It is not about speed alone

New product introduction has historically been a serious challenge for insurers. According to Celent, a new product introduction on your legacy system could cost millions and take months to accomplish. EIS research shows it takes the majority of carriers between 12-18 months. Furthermore, depending on the age of your legacy system, your ability to introduce new products could be even more severely restricted, says Celent. Expect increased complications if attempting to introduce products your legacy system would have never anticipated, such as pet insurance, merchandise discounts, and identity theft.

But entering the small case market is not a problem of speed to market alone. The bigger issue is what products and plans can you offer once you get there.

More importantly, for the small case market, is the ability to bundle products into plans that are tailored to diverse needs. Fortunately, the next wave of product design provides insurers mass personalization of their product offering to employers and employees.

Thinking it through

To get it right, carriers should expect their product offerings from core to voluntary to adjust to the needs of each demographic within the small case market. It’s not a one-size-fits-all approach; a small accounting firm has different protection needs than does a small construction firm. But what they both need is the experience of simplicity. Carriers should be able to bundle the appropriate set of products and plans per market segment with the limits and values preset. This is not saying the coverages are simple; rather, the complexity is already thought through by the carrier and presented simply to the small business owner. As in my own mass personalization experience, the first task is to understand your customer then sort and pack the right products to fulfill their needs.

But what I have been hearing time and again from the dozens of customers and prospects that we regularly interact with is that their legacy technology essentially hard-codes their plans into the system. Some carriers very literally have thousands of these plans, somewhere hard coded in compiled code, never able to be untangled or reproduced and modified and leveraged for mass personalization. Add to this conundrum the simple fact that it was never contemplated that their systems store actual customer information such as interests, needs, preferences, measurements or anything else not specifically required to facilitate the sale and support of the actual hard-coded insurance product being sold.

Easing the pain of plan building

The task of creating customized plans, packages and options is a difficult and often manual process. It slows down the new business processing cycle times and creates potential problems for the carrier when the sold plan may not be fully supported by the carrier’s systems.

The solution is a plan and package designer tool with which non-IT users are able to configure an unlimited number of plans and packages all generated from the base product. Each plan can have predefined default data pre-populated to eliminate error-prone manual entry of data. Embedded in each plan is a multitude of rules which will ensure that any plan option that was sold is compliant with the company’s product filings and is fully supported by the system.

Mass personalization is a perfect fit for the small case market. It results in customers thrilled with their personal products but also provides a significant reduction in new business cycle time and delivery of a better experience to the company’s producers and customers.

Find out how EIS can help with your mass personalization efforts. Book a call.

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