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Taking a Proactive Approach to Risk Management in Insurance

Published Date
Author Smart Communications

 
 
 
 
 
 
 
 

By: Ruth Fisk, VP of Insurance Marketing at Smart Communications

Insurance exists to protect us – as individuals, as families and as businesses – and assist us when we need it most, after natural disasters, accidents, illness and more. When it comes to risk management in insurance however, the industry is at an inflection point. Today, insurers need to take a more proactive approach to risk prevention.

A convergence of several macro-level trends is forcing insurers to rethink how they manage risk and engage with customers. Those trends include:

  • Increasing customer expectations for personalized, real-time interactions
  • Growing access to data and sophisticated technology
  • Rising competition from up-and-coming insurtechs

 

For decades, insurers have used a reactive approach to business. If an event occurs, a customer will initiate a claim and the insurer will respond appropriately. Today however, insurance companies must evolve to become more proactive and minimize risks as much as possible.

In this post, we dive into why a more proactive approach is beneficial to risk management in insurance, how modern technology and new coverage models can be beneficial and why optimizing customer communications is integral to success.

Sharing Education Opportunities

A proactive approach to risk management in insurance begins with education. In the midst of hurricane season, for example, customers need to be better prepared from an insurance perspective. There are some customers that have probably been insured for decades but have never filed a claim. If insurers are providing helpful emergency preparedness advice up front, it ultimately creates a better experience for customers if they know what to do before disaster strikes.

We have also seen an increasing number of insurers sharing advice guides, which aim to steer customers to the kind of coverage they should have, their greatest areas of risk and more. Whether it’s preparing for storm season or advice for a young adult just starting out, there are countless areas where insurance companies can provide more education, such as:

  • How to protect property from further damage
  • Tips for preventing housefires
  • How to prepare a disaster plan
  • How to file a claim
  • Benefits of a connected home
  • Wellness tips, including nutrition, exercise and stress reduction

 

New Use-based Coverage Models

Many up-and-coming insurtechs are moving to newer service models that provide coverage on a need-only basis – think a “pay as you go” model. For example, Trov offers digital, in-app embedded insurance products while Slice provides usage-based insurance products anytime and anywhere.

By adopting new coverage models, insurers can meet customers where they are. With telematics, Artificial Intelligence (AI) and more, insurers not only reduce risk, but also enhance the overall customer experience. The industry has already started adopting some of these practices with programs like safe driving apps that leverage telematics and data to help drivers secure better rates. And with homes becoming “smarter,” insurers need to take advantage of the data and insights newer technologies provide. Hippo, for example, offers monitoring systems that protect against fire, water damage and theft.

A New Era of Customer Conversations

Today, anything consumers want is only a few taps or clicks away. And with the pandemic forcing many people to rely solely on digital to meet even basic needs, customers have higher expectations than ever.

Insurers are increasingly being measured by how well they know their customers – experiences must be tailored to the individual. Successful personalization efforts depend on great data – collecting it in a way that is frictionless for the customer, and then leveraging a robust customer communications platform that can put it to use. Moving to a cloud model and leveraging open APIs will support a more modern and proactive approach to risk management in insurance. This will allow data from core systems, third-party solutions and more to be incorporated into tailored, personalized customer conversations.

Ultimately, customers want to feel like a name, not a number. Insurers that provide customers with risk mitigation tips and strategies, plus tailored advice to prevent (and what to do in the event of) an accident or natural disaster, will be the ones to come out on top of the competition.

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Smart Communications is thrilled to be a Platinum Sponsor of Guidewire Connections 2021. Please stop by our booth (P2 in the Partner Pavilion Pinyon Ballroom) to chat with us and learn more about how we empower insurers to deliver more personalized customer conversations. 

You can also catch us at our speaking session:

Mountain West Enriching Policyholder Experiences with Digital-First Strategies

Wednesday, Nov. 3, 2021

3:45pm – 4:30pm PST

Ironwood 1-2 

If you’d like to schedule a one-on-one meeting with one of our representatives, please contact us today.