My Life Insurer’s Missed Opportunity
By dedicating myself to a plant-based diet and exercising regularly, I’ve lost 31 pounds (14 kilograms) in the past three months and lowered my blood pressure. Family members, friends and co-workers have been very supportive – a co-worker who lives in my city even bikes the nearly 19 miles (30 kilometers) to Sapiens with me on occasion.
But one entity has been notably silent regarding my recent lifestyle changes – my life insurance carrier. My provider remains totally unaware of my progress, which is perhaps unsurprising in an industry characterized by infrequent customer contact.
“Life insurance is a very low-touch product,” wrote Ernst & Young in their “Life insurance distribution at a crossroads” report. “Thus, insurers lack close and regular contact with consumers. By relying on agents to determine what customers wanted and meet their limited communications needs, insurance carriers lost sight of evolving market needs.”
This lack of contact with customers leads to missed opportunities for life insurers. If my life insurer offered a digital customer engagement platform that monitored and analyzed my behavior and encouraged a healthier lifestyle via incentives, the carrier would benefit from a treasure trove of data about me – as opposed to relying solely on the answers I provide and infrequent doctor visits.
I’m using a vívoactive smart watch from Garmin that tracks my cycling, swimming, steps per day and heart rate; and a Withings Smart Body Analyzer scale that tracks and logs my weight via the company’s intuitive mobile app, offers localized weather forecasts and records my daily number of steps. With greater insight into policyholders and their lifestyles, carriers can offer superior customer service and products.
“Insurers can develop products that are customized as per the needs of customers,” wrote Capgemini in its “Wearable Devices and their Applicability in the Life Insurance Industry” report. “The input to designing such products could be the risk exposure, daily activities around a healthy lifestyle, sleep patterns, and heart report. Such data is generated from wearable devices and can drive the future product development and marketing phase of the life insurance value chain.”
Screenshot from Eric’s vívoactive web app.
If my carrier knew about my improved health, it could offer me a lower premium, which would increase my feelings of loyalty and strengthen the company’s brand. My carrier could also try to cross-sell me related life products. For instance, U.S.-based Transamerica Life Insurance Company advertises “Innovative products geared to your active lifestyle,” including up to 30 percent savings for living an active and healthy lifestyle, and bicycle insurance.
With my 40th birthday rapidly approaching, I plan to intensify my diet and exercise plan regardless of my relationship with my life insurer. But in terms of the future, millennials (Generation Y) expect a higher level of service and connection than previous generations. Life insurers who engage more often with their customers will reap benefits such as reduced costs, improved customer loyalty and retention, and greater efficiency. Those benefits definitely lead to a healthier bottom line…