A Critical Look At Insurance In A Personalized World

As of 2019, insurance penetration in Kenya stood at 2.4 percent which points to a low level of insurance uptake in the market.

While leading in the East African community, there is room for further penetration across different geographical locations and income levels.

To make sure this happens, insurance firms will need to eliminate existing barriers such as lack of awareness and exposure to relevant products.

Compared to past decades, consumers today are living in a personalized world that designs products specified to meet individual needs. As such in many industries including retail and communication, firms have had to introduce processes that are data-driven and customizable. It is no longer a ‘’one size fits all’’ economy and the same applies to insurance firms.

The case for personalized insurance

In light of this, insurance firms now have the opportunity to transform the industry and drive its growth by leveraging technology and tapping into the changing consumer landscape.

By focusing on tailoring products and services to serve individual needs, insurance firms stand to see increased uptake and enhanced loyalty from previously unserved customers.

A personalized policy approach puts the customer at the center, allowing for adjustments and innovation that is relevant to the user.  For instance, Covid-19 saw an accelerated push towards digitized processes from customers with new and existing customers seeking firms that had efficient digital platforms.

Be it getting onboarded to a policy or claims processing, automated processes gradually started becoming a key determinant for consumers when choosing which insurance firm to go with.  As such, firms that were consumer-led rather than product or legacy-led were better equipped to digitize processes, effectively tapping into and attracting more clients.

That said, to drive the successful introduction and uptake of customized insurance products, insurance firms will need to adapt and leverage data to make informed decisions.

With a wide array of consumer data available, firms can better serve their consumers by interpreting and applying data in an intelligent manner. For instance, with the increased uptake of wearable devices, insurance firms can collect data about a person’s lifestyle, which can be used to determine their risks and possible needs in the future.

This way, an insurance firm can design a customized policy that determines pricing based on data-led insights. In line with this, usage-based insurance has gradually been picking up globally, with technology such as telematics giving insurance the ability to design motor policies that consider driving habits.

Personalized policies also help with managing operational costs. By leveraging on data and automated processes, insurance firms can quickly point customers towards policies that are a great fit, allowing for a faster onboarding process. This enhances the customer journey and ensures that the customer gets a product that they feel is best suited for them.

Conclusion

The insurance industry is experiencing disruption and to remain competitive, firms will need to invest in technology. With many market entrants including InsurTechs, insurance firms that are consumer-centered will have a competitive edge. Today, there is a need for more adoption of insurance in the market, and personalized insurance products can further influence and accelerate this process.

The writer is Joseph Kamiri, the GM Marketing & Customer Experience, CIC Group Limited