The insurance sector benefits greatly from n=1 personalization (aka. hyper-personalization, aka. Segment of One).
One company we work in that market segment was faced with a lack of coordination in messaging across channels, as well as stagnant or declining renewal rates. The question was whether more relevant and better coordinated messaging might make a difference in renewals, so we agreed to test that. For this purpose, we implemented highly-personalized communications, optimized by channel and message frequency at the individual customer level, plus AI-enabled renewal workflows that leveraged predictive renewal risk scores and other indicators.
The result was a statistically-significant 60 basis point improvement in 13th-month persistency, and a quite impressive 530 basis point improvement in 61st-month persistency. These results were so significant that they were reported in the annual report.
In general, the performance boost from smarter messaging in the life insurance sector includes a 20-35% increase in lead-to-policy conversion rates, and a 30-50% improvement in additional policy sales to existing customers – even for brands with very sophisticated technology in place already. Bottom line: Life insurance companies achieve 15 to 25x ROI (incremental revenue vs. licensing cost), so the solution pays for itself in the first 30-60 days.
The technology that fuels this is SOLUS.ai which was a first mover, and is currently a market leader in the AI-First category of customer engagement software. Notably, SOLUS has been able to implement the aspirational goal of Segment of One – acting as a system of intelligence that sits between users’ existing data sources and their existing engagement channels, generating individual customer-level nudges that combine recommendations, propensity scores, and stacked models, rather than broad segments or static rules.
Insurance brands that use SOLUS range in size from 500,000 to over 50 million customers, across agent and direct channels. In each case, SOLUS acts as the core intelligence system, driving all CRM and marketing efforts, enabled by downstream integrations to each brand’s preferred systems that orchestrate messaging and recommendations via policy management systems, agent portals, mobile apps and omnichannel.
One key use case for Segment of One in life insurance is to enable recommendations for suitable products like term, variable universal life or whole life, based on life stage and financial profile. Another important use is automated nudges from lead nurturing to policy purchase, premium reminders, cross-selling additional coverage, and lapsed policy revival. SOLUS is also frequently used to drive policy upgrades and additional coverage, which is done using propensity models that identify customers ready for higher-cost offerings or new products, replacing other types of methods that underperform at this vs. Segment of One.
So if you’re responsible for sales or CRM in the insurance sector (or for a family of financial services including insurance, along with mutual funds or asset management), then feel free to get in touch, and let’s do a test!
AI Master Group is a B2B channel partner for SOLUS. Full implementation takes one week.
Jim Griffin is a faculty member at the University of Texas, Austin, in the Masters of Business Analytics program. He’s also the founder of AI Master Group, which delivers high-impact consulting and resources related to AI. Jim has more than 15 years of project experience in North America, Europe, the Caribbean and Asia Pacific, with projects involving AI, analytics, machine learning and CRM. He also has a popular YouTube channel and podcast devoted to AI.
Contact the author
Apparel retail presents an excellent example of the problems and opportunities for n=1 personalization. A key problem for apparel retailers is that products change every season, so it’s especially difficult […]
