Why Business Insurance Policies Need to Be Customized

Tradespeople generally face occupational hazards such as accidental property damage, damaged tools, and unhappy customers. All these hazards can lead to project delays and huge financial losses. One way to avoid such a situation is to carry insurance for tradesmen. This is a specialist business insurance policy designed to protect tradespeople against certain work-related risks. It offers various coverage options including employers’ liability, tools insurance, and public liability coverage. It can cover, among other things, legal fees, compensation costs, and tool replacement costs. A tradesman insurance policy can be customized to cater to the unique insurance needs of different tradesmen and industries. Here’s a look at reasons why business insurance policies need to be customized.

Customized Insurance – An Overview

A recent study from McKinsey & Company describers customized insurance as reaching potential customers with offers, pricing, and targeted messaging at the most appropriate time. Insurers generally leverage analytics to create insurance solutions that cater to the personalized needs of individuals. Analytics-driven personalization leverages data to customize decisions and experiences across the entire insurance value chain. Insurance companies can use analytics to drive internal processes and strengthen external relationships, and therefore, improve customer experiences and organizational efficiency. Combined, these improvements help create better insurance solutions for all.

While insurer providers have always leveraged data, today’s data-driven insurance market makes it is easier than ever to collect, categorize, and analyze data in order to make data-driven decisions. Technology and tools such as analytics, artificial intelligence (AI), machine learning, and the Internet of Things (IoT) not only help prevent insurance fraud and improve underwriting practices, but also help insurers customize business insurance policies to meet individuals’ needs.

Importance of Customizing Business Insurance

Customized business insurance policies are important because of the following reasons:

  • The modern insurance consumer demands customized solutions. According to a survey conducted by Accenture, the modern insurance customer expects personalized services and product offering. Specifically, the survey found that about 80% of insurance customers want their insurance providers to deliver customized marketing messages, pricing, offers, and recommendations. Based on the results of the survey, an insurance provider that offers personalized business insurance solutions is likely to have an edge over the competition. With customers increasingly expecting their insurance agents to be both risk preventers and proactive advisors, customization of customer service and marketing messages are no longer enough to deliver a delightful customer experience. Therefore, to meet customers’ expectations, insurers must advance their levels of customization.
  • Gain an edge over the competition. Despite the many reports that highlight the value of customization in the insurance industry, insurers seem reluctant to adopt it. For instance, a study from Youbiquity Finance reveals that than 20% of insurance providers offer no customization.
  • Increase revenues. According to Boston Consulting, businesses that leverage data to create customized experiences are seeing revenue increase by as much as 10%, which is 300% faster than those that don’t. Instead of looking for the lowest quote, insurance customers are increasingly looking for insurers that can improve their well-being and safety on a daily basis.

Benefits of Customized Business Insurance Policies

Depending on your insurance technology, you can deliver different types of customizations. The common levels of customization include:

  • Customization based on individual behavior
  • Demographics based customization
  • Customization based on data collected from real-time customer interactions

The information gained in real-time during a customer interaction tends to be the most accurate and useful. However, any detailed level of customization will benefit both the insurance provider and the customer. The main benefits of customized business insurance policies include:

  • Serving customers accurately and enhancing efficiency. Having a 360-view of your customers would allow you to deliver faster and more accurate services to them. However, this requires a high of insight. Specifically, you’d need to use demographics and data generated from other sources, such as social media activity, to create robust customer profiles.
  • Increase sales. Personalized insurance can benefit sales initiatives in two big ways. Firstly, insurance customers are generally willing to sign up for insurance plans that reward customers who share more of their data with lower premiums. Therefore, it is a good way to attract potential customers. Secondly, with a better understanding of your customers’ preferences and behavior, you would be able to improve the accuracy of your targeted marketing campaigns, allowing you to offer your customers exactly what they need.
  • Making leveraging data easier. With customized insurance capabilities and their corresponding analysis tools, you can easily access dashboards and self-service reports that answer common questions related to management or operations, and provide insights to your claims handler, underwriters, and executives.
  • Improving customer satisfaction/engagement. You can use customized business insurance policies to make your customers feel appreciated and valued.

Tips for Creating Customized Business Insurance Offerings

  • Adopt analytics-driven technology and solutions. To leverage data, you need to be able to collect and analyze it. Therefore, to enhance your customized business insurance offering, you need to implement solid technology infrastructure. You do not necessarily need to start with a powerful and sophisticated cloud-based platform. Instead, you can start slow with, say, a digital claim solution.
  • Know your customers’ pain points – With a comprehensive analytics system, you would be able to turn customer data into a valuable resource, allowing you to gain insights into your customers’ needs and preferences. Knowing your customers’ pain points would empower you to customize your services and offerings accordingly.
  • Deliver a cross-channel customized experience – Customized insurance is heavily reliant on data collected from different technology platforms and IoT devices. Therefore, the level of customization needs to be the same across different touchpoints.
  • Provide real-time, personalized responses and interactions — Most insurance customers have high expectations when it comes to communication. For instance, a recent study by HubSpot revealed that most customers expect businesses to respond to their concerns, comments, or questions within 24 hours. Besides timely responses, customers also expect a personal touch.

Conclusion

Business insurance needs generally vary by business and by industry. In the skilled trades industry, for instance, carpenters, welders, plumbers, and mechanics, face different occupational risks. Even within the same industry, the risks tend to vary from one business to another. To create customized business insurance offerings, insurers need to leverage analytics-driven technology and solutions. In other words, they need to invest in the right technology infrastructure.

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