The Pulse

U.S. Consumer Survey: A Connected-Devices Insurance Roadmap

More than half of consumers using connected devices are interested in earning rewards for sharing data with their insurance carriers

A new report from Aite Group, a global research and advisory firm, identifies trends in consumer technology habits, and how the industry positions itself to connect with them. Visit aitegroup.com

Boston, May 29, 2019 — Insurance carriers’ customers are purchasing and using connected devices in ever-increasing numbers and generating personal information about themselves and their lives. These connected devices and the data they generate constitute a hidden gem for insurance carriers, which are in search of new ways to engage with customers and maximize retention.

But can carriers influence consumers’ decision to share their data? Aite Group’s new report, U.S. Consumer Survey: A Connected-Devices Insurance Roadmap, offers fresh insights into a willingness to share data with their carriers in exchange for a range of rewards.

Engaging The Customer

“Insurance carriers looking for consumers accustomed to using connected devices and ready to talk about how to use that data will find millions of opportunities to engage with their customers in a customized, highly relevant, and timely manner,” states Greg Donaldson, senior analyst at Aite Group.

This new report provides a baseline of U.S. consumers’ use of connected devices and is based on a Q1 2019 Aite Group survey of 766 U.S. consumers who were asked about their thoughts concerning connected devices and technology. It will be of interest to insurance companies that want to develop deeper, more meaningful relationships with existing customers.

Excerpts From The U.S. Consumer Survey

Losing Faith
Customers are losing faith in their insurance carriers in the face of constant price increases, complex products, and limited interactions. Insurance carriers must seek out a new pathway to enable more meaningful customer engagement and  maximize retention. Connected devices and the data they generate constitute a hidden gem when it comes to establishing better customer connections. Carriers need to recognize that their customers are purchasing and using connected devices in ever-increasing numbers as well as gaining fast and convenient access to personal information about themselves and their lives. Insurance companies must capitalize on the wealth of data from these consumer devices and use it to forge and tighten bonds with their user base.

Insurance executives seeking deeper customer engagement and striving to differentiate their offerings will find these consumer insights can chart their marketing communications strategies and personalize their messaging. Insurance providers that understand the nuances of their target audience will boost their customer interaction levels and increase consumer responsiveness to rewards and information.

Insurance carriers looking for consumers accustomed to using connected devices and ready to talk about how to use that data will find millions of opportunities to engage with their customers...

The Market
Tapping into data from U.S. consumers’ connected devices is no longer a futuristic strategy for carriers as more consumers become comfortable with what these devices offer and realize that these devices can improve everyday life. While usage of devices continues to increase, consumers hold onto concerns about data integrity and security. But they are open to trading personal data for various discounts and benefits.

Insurance carriers have historically not been the quickest to engage with their customers in a relevant and compelling manner. Interactions have been generic, periodic, and reactive, and carriers’ mentality has been, “If it isn’t broke, why fix it?” But with consumers changing carriers at any time, customer loyalty is a thing of the past, and this mentality is no longer practical. Customers using connected devices indicate a willingness to seek out more information about programs that could offer discounts or gift cards of up to 15% of their premium, or offer pertinent information about their policy, their safety, or potential disasters, in exchange for the data generated by connected devices. Insurance carriers must ramp up rapidly to understand how these devices and the data produced by them can lead to new business opportunities as well as deeper customer interactions

Reward Program Overview
For insurance carriers looking to explore the use of connected devices in their current programs or considering a foray into this world, it is important to understand and respect the customer’s willingness to participate or motivation for opting out. Connected devices and the data they collect present customers with a unique opportunity to become part of the transaction with their insurance carrier and play an active role in those interactions. Carriers need to focus on how to best reward customers in exchange for their data.

The rewards arrangement entails the insurance carrier collecting data about customers from their devices or apps and then using that data to provide customers with discounts on their premiums, gift cards, or catalog points systems, to name a few types of programs. This section examines consumers’ interest in finding out more about certain types of programs that offer rewards and benefits in exchange for data.

To request a copy of this report please contact Aite Group at [email protected].

 

 

 

About Aite Group:
Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We partner with our clients, revealing their blind spots and delivering insights to make their businesses smarter and stronger.