Customers green light digital spying for reduced insurance prices
How much does privacy really mean to insurance customers? If it means lowering insurance prices, perhaps not that much.
That seems to be the conclusion we can draw from a report released today by MuleSoft, a provider of a platform for building application networks, entitled Consumer Connectivity Insights 2018. It surveyed more than 8,000 consumers globally to assess whether firms are meeting customer expectations and providing a truly personalised experience – and it seems there is an open appetite for the use of social media and IoT data if it leads to a more individualised service and reduced premiums. It found that 44% of customers would be happy for insurance providers to use third-party data from the likes of Facebook, or collect data about them from smart home devices and health monitoring apps, to potentially personalise their service and lower premiums. Among younger generations this appetite grew even further – 62% of 18- to 34-year-olds were open to the concept. There was a geographical discrepancy, however, with those in Singapore (63%) and the US (49%) showing the most willingness, while those in the UK, at 36%, were actually the least open. “The research highlights that nearly half of consumers would be open to insurers using this information to enhance their services and gain a competitive edge by providing more personalised offerings,” said Jerome Bugnet, EMEA client architect, office of the CTO, MuleSoft. “If such data is made readily available by social media sites to insurance providers, the industry should work with regulators to ensure processes are put in place to enable customers to indicate whether they want these additional data sources to be used to calculate a more personalised premium. “However, insurers are already struggling to deliver a connected experience before even considering how they bring all these new data sources into the equation. Those that are unable to overcome this challenge risk damaging customer loyalty and falling behind the more innovative insurance providers.” Indeed, just as Bugnet states, there does appear to be a disconnect with the service that insurance is currently providing. The survey found that insurers are seemingly lacking when it comes to knowing about their customers’ preferences with 58% believing insurers offer a “disconnected” experience, while 56% would even consider changing insurer because of a disconnected experience. Those in Australia (67%) and Singapore (63%) were the most likely to consider a change. Other insights expressed in the survey included that 46% of customers believe applying for insurance should take no longer than one hour; and nearly half – 45% - would like to use services such as WhatsApp, Facebook Messenger and Viber to interact with insurers.