It recently hit the news that John Hancock, a US-based insurer with 156 years’ of history, will shun the traditional approach to underwriting and begin exclusively selling interactive life insurance policies. The move means that life insurance packages and rates will be informed by tracking health and fitness data through wearable technology like Apple Watches and Fitbits. With even the oldest life insurers breaking from tradition, it would be remiss to ignore the trend.
Going interactive is a bold move for a legacy insurance brand, but Insurtech is a growing trend the world over – and for good reason. By tracking fitness levels and incentivising exercise with rewards like gift vouchers, interactive life insurance is marketed as a ‘win-win’ for provider and customer alike. After all, the healthier an individual, the less likely an insurer will need to pay out. In fact, over half of wearable device owners believe that their tech will help them increase their life expectancy by ten years.
But it didn’t all start with John Hancock. Companies like AIA in Australia and Vitality in the UK are already offering similar interactive insurance policies. Car insurers are using in-vehicle trackers to build accurate quotes based on driving style and safety. Technology providers like Fitbit have also recognised the opportunity and are jumping on board, adapting their products to make sure they capture the data that insurers need.
But tackling interactive life insurance comes with its challenges. When a brand is tracking every step its customers take, privacy regulation is very important. Insurance marketers need to develop the right messaging to ensure they are transparent with their customers about how they are using their data and which other parties will have access to their information.
When a brand is tracking every step its customers take, privacy regulation is very important.
Challenges aside, what’s clear is that the traditional insurance market is evolving – and quickly. We’ve already seen the growth of gamification in the industry and even the use of emerging technologies like drones. Small, agile tech-first insurers like Lemonade are making a splash. Meanwhile, the insurance giants are investing heavily in Insurtech and even setting up their own venture capital funds to incubate new tech solutions for their future.
Time to act
With this in mind, it’s time for insurance marketers to look at their own brand positioning and ask themselves the following questions:
- Does our brand’s customer value proposition still hold true in this new insurance landscape?
- Is our brand still unique in the market – what space does it occupy?
- What is driving new customers to choose our brand?
- Does our brand’s messaging really reflect what customers are looking for?
- Does our brand’s marketing tie in with and promote our innovation roadmap?
Insurtech is making its way into the mass market and is set to change customer experience for insurance brands forever. Get on board while you can.