Optimize Customer Communication with Insurance Telematics

How often do typical consumers interact with their insurers? Until recently, the answer would have been once a year, maybe once every six months – unless of course they have to file a claim. Actually, 44 percent of insurance customers may go for more than 18 months with no contact at all. Traditionally, insurance just hasn’t been a communications-heavy industry. That’s about to change.

The blessing and curse of slow communications

On one hand, a low volume of customer communications is a blessing, consuming fewer business resources and demanding little focus. But when you consider what businesses gain from better customer communications, that lack of volume is clearly also a curse.

For one thing, frequent customer contact leads to superior customer satisfaction. It leads to improved customer retention as well.

“Healthy and positive interpersonal relationships generate trust and win the commitment of the customers towards your business,” said Entrepreneurial Insights. “They also help in reducing uncertainty in the minds of customers regarding your products/services. By consciously trying to create a bond with customers by fostering positive relationships, you can improve your customer retention rates.”

In short, insurers who aren’t communicating with customers in a frequent, meaningful way are missing an opportunity.

Constant connection: the way of the future

In every industry, the Internet of Things (IoT) is making C-level leaders reevaluate just about every aspect of their business, communications no less than any other. With new channels popping up left and right, insurers today have a whole new opportunity to reinvent customer engagement for the industry.

The IoT is already transforming how things work. Over the next decade, we can expect those changes to twine themselves into the fabric of society even more deeply: wearable devices. Home automation. Mobile everything. In insurance, the key word is telematics.

How insurance telematics can lead to new heights in communication

Traditionally, the relationship between customer and insurer was facilitated by brokers. But in an IoT world, customers are going direct. They want more frequent, more personal, more meaningful contact, and telematics can give them that.

“Usage-based insurance programs are a game changer in that respect, as they enable insurance companies to establish new direct communication channels towards customers and eventually gain ownership of customer relations,” said Sheetal Kumbhar at IoT Now.

What to make of this? Three things.

Communications strategies for the telematics-tuned insurer

• Transform insurance into a daily communications channel by delivering insurance telematics via smartphone
• Leverage mobile apps to establish communications that are higher-quality and more frequent, increasing customer satisfaction and retention
• Harness opportunities to up-sell and cross-sell by using aggregated data to target audience traits and identify key sales moments

In short, insurance telematics makes a higher communications volume possible by delivering a stream of valuable, relevant content to customers every time they drive. And because much of this communication can be automated, it remains cost-effective and highly efficient for the insurer.

“Several insurance companies offering usage based insurance reported frequency of more than 10 visits a month for the customers checking their online driving score,” Kumbhar said. That’s a big increase from once every 18 months – and it pays off. According to Kumbhar, Allianz reported a spike in cross-sell ratio stemming from higher customer engagement.

The shift to digital communication is ripe with opportunity. Will you leverage it? To learn how Driveway Software can help, download our Fact Sheet.