How high-value customers are the next big insurance battleground
The cutthroat nature of competition in the insurance industry has kept insurance providers and professionals everywhere ready to change their business models at any minute; after all, companies which can’t adapt to changing market conditions inevitably die out. Recently, insurers and professionals with an eye on the future are paying more attention to high-value customers, largely because they see them as being the next big insurance battleground where the fortunes on the industry will be won.
Here’s how high-value customers are slowly but surely becoming the next big insurance battleground, and what that means for the future of coverage.
Customers aren’t coming in like they used to
There’s no use beating around the bush; customers simply aren’t flocking to insurance providers in the way that they used to. With customer loyalty and retention rates skyrocketing amongst most insurance providers, it’s becoming almost effectively impossible to draw new customers in by prying them away from your competition. With some 90 percent of customers in a recent survey having stuck with their insurers, it stands to reason that this trend will continue into the foreseeable future, making it more and more important that insurance providers focus more on their high-value clientele.
Various insurance companies and brokerages, from newer startups to the established, like BrokerLink, are starting to wake up and smell the bacon, realizing that the industry they once knew is now in the rearview mirror thanks to technological changes which have deeply disrupted the industry. The next insurance battleground won’t be fought within the digital arena, however, but in the real world over the pursuit of high-value customers who can spend exuberant sums of cash on their insurance policies.
High-value customers and their preferred risk profiles are tantalizing for insurers for one simple reason – they can bring in more revenue than anyone else. In addition to this, they also usually have better credit scores, fewer violations of their policy rules, and generally will pay higher premiums for as long as they enjoy coverage with their current provider. Given that carriers who are seeking to expand their customer base in the future won’t find so much look in swiping away their competitors clients, they’ll have to focus on pleasing this narrow audience if the want to remain financially stable for long.
Rather than trying to scoop up as many customers as possible, insurers should instead focus on finding the right sort of customer and catering heavily to them with nearly all of their resources. This personalized approach to the future of insurance is a perfect fit for the increasingly-digital direction that the industry is headed in.
It’s about to get more personal
There are two fundamental drivers of change in the insurance industry right now – technological change and the personalization of services in an effort to derive greater payments from customers. As more traditional insurers realize that they can become major disruptors by tapping into the power of personalized marketing, this trend will continue to pick up until it becomes the norm across the industry. Technology which allows us to vacuum up huge troves of data to better understand the risk profiles of customers will also continue to drive the industry forward in a way conducive to the chasing of high-value customers who are few and far between but nevertheless worth pursuing.
Whereas the insurance industry has long been product-centric, it’s now entering into a new era where the insurance professionals who are the most successful have become customer-centric. Customers these days are wiser and have access to greater sums of information about the competition than ever before, so if you stiff them it won’t be long until they wise up in regard to what’s happening. Focusing on consumer gratification and appeasing a narrow yet important band of customers is thus going to be increasingly crucial for providers who don’t want to crumble in on themselves.
While customers were once disconnected from their insurance providers on a daily basis, the future will see insurers constantly catering to the needs of high-value customers with regular check-ins that ensure they’re pleased with their coverage. Delivering greater perks to customers will demand harsh introspection that enables professionals to uncover the elements of value in their industry that they should be focusing the most one. Given that this is the only profitable way forward, providers are going to have to become comfortable with this strategy one way or another.
Exciting technological changes are disrupting the insurance industry, but all eyes should be pinned on the growing focus on high-value customers. The handful of elite customers who providers can derive huge profits from are going to become increasingly important when it comes to subsidizing others who insurers lose money protecting. For all the focus on nascent technologies and digital disruption, the growth in importance of high-value customers can’t be dismissed when it comes to determining the next big insurance battleground.