A benefit plan that saves the customer money every week, at the gas pump, parking garage or service center, provides the customer with opportunities to appreciate the insurance provider for saving them money. Everyday savings for all the things they do and for their car change the relationship between insurer and customer. Benefits that appeal to car owners come in four categories:

Vehicle-related discount benefits: Customers who use their vehicles regularly will wash them, gas them, park them, and maintain them. Offering discounts on all of these provides benefits nearly every time an owner spends money on their vehicle.
High perceived value benefits: Bundling benefits that customers currently pay for as part of the member program immediately adds value. In the same way that the American Express card includes a free membership to Paramount+ or a membership to a priority lounge club, an auto benefits membership can include free roadside assistance, free towing and access to a mechanic hotline. In the customer's mind, they are getting the same peace of mind as an auto club membership that many are paying $100 a year or more for.
Time-based benefits: One of the key aspects of a member program is rewards that are earned with loyalty. Having time-based rewards provides an incentive to stay with the insurer rather than letting the policy expire and changing insurance companies. Earning a free oil change after a year of membership or a free car wash every quarter offers a reason to keep the membership active for a few extra months. Time-based benefits can also assist with retention during the member cancellation flow. "Are you sure you want to cancel? You're just one month away from your free oil change!"
VIP benefits: One value of a membership is the emotional experience of feeling special. For those who are members in the benefits program, adding a member hotline that is answered with a priority call attendant lets customers know they are special. United Airlines has a different phone number for customer service for its 1K members with a rep who greets the customer by name.

Where the industry is heading

Capgemini published in its World Life Insurance Report that 74% of customers are interested in personalized value-added services and rewards from their insurer, but only 8% of insurers have built an effective value-added proposition. Offering a plan that consumers want and earn savings from daily or weekly will drive far greater retention and lifetime revenue from each customer. The small change of bundling benefits is an accepted business practice in multiple industries and one that needs to take hold in the insurance business.

Special Reports /

The insurance industry is selling roadside wrong

Related Stories

Recommended For You