How Smart Technology Enables Insurance Companies to Capture More Customers
The insurance industry is struggling with greater levels of churn, as more people are willing to switch carriers and customers’ expectations are rising. Replacing customers is a large expense: the cost can be five to 25 times more than retaining an existing customer.
“In the past, customers stayed with their insurance carriers for an average of five to seven years,” says Brett Jurgens, co-founder and CEO at Notion. “We’ve seen this number drop recently as customers are becoming less brand loyal and have higher expectations.”
As customers become hyper-connected, and as faster, more convenient and engaging experiences are found in all corners of business, insurance carriers are looking to smart technology to provide a competitive edge.
How smart technology attracts more customers
Competitive differentiation is a critical advantage for insurance companies working to stand out in the minds of customers. “Many policyholders want to spend less money on insurance premiums,” says Jurgens. “Smart technology empowers carriers to provide customers with a discount and a technology-enabled experience that fosters a more proactive role in the customer journey.”
Customers also gain a new understanding of potential risks within their homes and how to mitigate those risks. “Over 80% of our users have never monitored water before installing Notion,” says Jurgens. “We also know that smart technology enables the homeowner to think about the carrier as more than just an insurance company, and that strengthens the relationship.”
Providing co-branded communication through a smart technology app assists with reinforcing customer retention. Useful home alerts quickly build trust with customers and help them feel more connected.
Staying connected to customers and fostering loyalty
Insurance carriers in the past may have only interacted with customers once a year during the policy renewal, which isn’t always enough to prevent churn. “Customers are interacting with the Notion app around 10 to 11 times per day,” says Jurgens. “These notifications are helping the homeowner understand the activity and potential risks in their home.”
Alerts can be sent to the customer for a variety of reasons, such as the opening and closing of doors, opening of medicine cabinets, or opening of safes. The customer can set up the system to send alerts when there is activity in a specific area of concern, such as places that children or animals shouldn’t access.
“When rolling out smart technology to customers, we’ve had great success with an opt-out approach,” says Jurgens. “The customer automatically receives an upfront discount, but to keep that price reduction, they must activate the technology. Also, the program is the most successful when it’s a top-down initiative, so agents can implement the program successfully to attract new customers.”
Strengthening the brand and long-term growth
Customer retention and acquisition will only become more important in the future as insurance companies work to combat other competitive insurance offerings. Now is the perfect time for carriers to rethink the use of smart technology in the context of customer relationships. Carriers that do this successfully will secure a competitive advantage as they capture more customers, drive higher retention rates, and promote long-term growth.