Are insurance firms protecting people in the digital realm?

Why don't insurance firms protect people in the digital realm?

Are insurance firms protecting people in the digital realm?

Insurance protects consumers from all kinds of disasters, including natural and man-made events, as well as accidental and intentional damage. During 2017, the insurance industry covered $306 billion in losses from natural disasters, more than $230 billion in damage from about 6 million car crashes, plus $15.3 billion in losses from burglary and theft. That's not to mention personal injuries, life insurance coverage, dog bites, boat accidents, medical claims and more.

Whatever the risks in life, there's an insurance product that helps minimize the chance that consumers will suffer significant financial losses and that helps them rebuild and recover when the worst happens, from a rained-out wedding to citywide fire.

Except for disasters in the digital world

In the online realm, there's little to protect consumers when trouble arises when using new technologies, from the web to smartphones to Internet-linked devices to live their daily lives. But that comes at the risk of identity theft, fraud, financial theft and more. And people are getting more and more nervous about those risks in their virtual lives.

They should be. During 2017, 16.7 million consumers were hit with some form of identity theft at a cost of $16.8 billion, up from 13.1 million victims only two years before in 2015. And while the typical ID theft victim spends less than $100 undoing the damage, in other cases ID theft means victims spend tens of thousands of dollars fixing problems. Sometimes they even lose custody of their children, find themselves charged with drug trafficking, and even get fired from their jobs. Things happen.

Another risk that goes uncovered by insurance is the risk consumers pose to themselves when they lack a good understanding of financial products. When it comes to credit and debt, consumers owed $13 trillion in debt at the end of last year. Between credit cards, cars, homes, medical bills, and student loans, the average consumer has $134,600 of debt. Few consumers understand how a few late payments or high credit card balances can hurt their credit rating – and affect costs such as auto insurance rates, in many states.

In insurance, risk means opportunity

Both online and financial education risks create plum opportunities for insurance firms. Insurance customers already see their insurers as financial guardians, protecting them from expensive disasters that could bankrupt them. It's only natural that insurance firms would be the ones to extend that protection to providing identity protection and financial education tools that can save them money, protect their reputations, prevent losses and guard their online lives.

As an analysis by Bain and Co. found: “Insurers are discovering that the best way to get

more quality time with their customers is to offer them non-insurance services — such as home security, car maintenance, health monitoring, financial planning and much more — that are natural extensions of their core products.”

Good news! It’s already built

Rather than take the time to develop expertise in identity protection, data safeguards, credit scoring and debt management – and risk missing out on these opportunities – insurance firms can partner with Experian Partner Solutions for ready-to-go white label solutions that can not only address customer needs and ally their fears but increase customer engagement and open new business channels, through lead generation and premium products that build on free, basic offerings. In addition, online and identity protection tools enhance the confidence clients have in your own online account management tools.

In less than 60 days, for example, you can roll out a comprehensive online protection package with Experian's Identity Theft Protection and Restoration product, faster and at less cost than developing your own solutions. Research from Synergetics already has found that nearly a quarter of customers would be willing to pay $5 a month for such protection, while 13 percent said they'd be willing to pay $15 a month or more to feel digitally secure. Every one of your customers can benefit from such a product, and this kind of monetization can add more than $200 in revenue per client per year.

Online alerts and updates, notifications about changes to credit scores and other ID and financial touch points offer increased engagement that customers want, along with added opportunities to interact with customers between policy renewals. How many opportunities do such product extensions offer? The Experian suite of services covers three dozen separate kinds of protection, education and lead generation tools you can put to use.

The areas of identity protection and financial education not only overlap perfectly with insurance products but also offer a logical, natural extension of risk management. When you consider that insurance has covered everything from Betty Grable's legs to the Hope Diamond, keeping people safe from bad credit and online scams just makes sense.

 

What's the path forward for Insurance companies? Find out as we discuss Acquisition, Monetization, Engagement, and Retention in our latest guide,The New Frontier for Insurance.

By Oscar Gonzalez  |  December 12, 2018   |  

Loyalty, insurance

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