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Loyalty Programs For Insurance Providers

The Insurance industry has become very competitive, with little or no differentiation. Consumers have different policies with different insurance companies, whereas Agents and brokers are not focused on one company and will more often than not push where they get better commissions.

This has made the insurance industry extremely competitive. The situation is further complicated by the entrance of banks in the insurance space. So, how do insurance firms differentiate themselves?

Focus of the program

Introducing a customer loyalty program is the answer to the question above. Insurance firms now have an opportunity to not only reward their customers for the different policies they sign up for, but also reward them for changing their lifestyles e.g. healthy eating, driving behaviour etc.

The insurance providers could also reward their customers for uptake or one or more than one product and thus use the loyalty program to increase product uptake through cross-selling. To spur subscriptions and a higher customer life time value, renewal rewards could also be introduced to ensure that customers will have the insurer in mind at the time of renewal.

To increase brand recall rate by customers, engagement is key. An insurer will most likely get in touch with their customers at the time of renewal. This means that from the time of sign-up to renewal, there has been little to no engagement with the customers. This is a major contributor to customer churn. Having a loyalty program means the insurance provider can keep the engagement going by having different incentive structures or customer engagement activities that can run throughout the subscription period. This will ensure a higher brand recall rate and less churn.

For the first time, insurance firms have the opportunity to use an incentive program not just to push their products, but also understand their customers on a more personal level, change customer behaviour and create more personalized customer experiences.