Insurers: How the next best offer can help you build sales and boost persistency
May 9, 2022,
Selling again to an existing customer is generally easier and less costly than selling for the first time to a new prospective customer.
And for insurance companies, selling more to existing customers can also have a positive effect on persistency – often a vitally important factor for profitability.
Quite simply, the more a customer buys, the more their needs are being met and the less likely they are to lapse any of the products held.
Therefore, up-selling, cross-selling, customer development, in-force development – call it what you will – makes great business sense for insurers of all kinds. In fact, it can even support and build the loyalty of your agents and other intermediaries, because it builds their business and income too.
This is what Riverside is all about. We create personalised customer communications that help insurers around the world to build sales, boost persistency and delight intermediaries.
And a key driver of the profitable results we deliver is the ability to find and communicate the next best offer.
Analytics-led customer communication
Arriving at the next best offer for any individual customer depends upon meticulous data analysis. This is the starting point in the process that we have built and developed over the past 17 years – working with over 40 million individual policy records in total so far.
We take as much historical data on the customer base as the insurance company can provide to us. Initially, the data is fully anonymised, without any name or contact fields that can personally identify any individual customer.
The data we typically analyse includes everything from essential demographics (age, gender) through detailed product holdings, premium levels and frequencies to payment methods and distribution channel history.
Minimising product and systems development
We also take care to understand your existing product range and systems capability in detail. This means that the offers we develop to maximise your success require very little development effort – and often none at all.
And in the rare cases where product development is required, our in-house technical and actuarial resource can provide experienced support.
Delivering in the way the customer expects
Once you’ve arrived at the next best offer for each customer, the way in which you deliver it is critical to success.
Provided it’s well developed, the offer will make logical sense to each customer, because it takes full account of their complete relationship with you. In fact, it should be seen as a valuable and natural addition to their existing product holding.
Accepting the offer should also be easy and straightforward – ideally as a simple addition to the customer’s existing payment mechanism.
With all this in mind, we’ve found that the most effective way to present the offer to the customer is as a fully personalised service message, rather than anything that looks or feels like marketing or sales.
Therefore, we use the channels through which your customers usually receive your administrative communications. We also take account of the visual elements, language and “tone of voice” that your customers would expect from you.
In short, the most effective next best offers are “business as usual communications” rather than “marketing campaigns”.
With results that can be very different from “business as usual”…
By successfully combining all the elements outlined here, you could look forward to some outstanding results.
For Life portfolios, we typically see between 10% and 30% of all customers included accepting and converting the offer to completed sales.
On top of that, lapse rates on existing policies held can fall by 12% – 30% over the 12 months following the offer communication. And that applies across all customers receiving the offer – not just those who accept it.
These persistency improvements are measured using the performance of control groups: customers not included in the communication but having the same profile as those included.
Valuable support for intermediaries too
For insurers operating through agents and other intermediaries, the communication programmes that we run can significantly boost distributor loyalty.
After all, this activity can generate additional income for the intermediaries, in exchange for little or no additional effort.
What’s more, the communication can provide additional leads and sales opportunities for them to follow up if they wish – often resulting in attractive new business and renewed discussions with their clients.
The key is to make sure that all intermediaries are kept fully informed at every stage of the process. And that they’re freely given the opportunity to exclude all or any of their clients if they wish.
I’d be delighted to tell you more…
For an informal conversation, without obligation, on:
- How you could use the next best offer to build sales and boost persistency in your insurance business
- How Riverside’s experienced project managers handle most, by far, of the work involved in the entire programme
- How Riverside will always share significantly in the costs – so we can only be successful if you’re successful too…
… please call me on +31 6 5047 9647 or contact Riverside today.