Product Configurators in the Insurance Industry

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Product Configurators in the Insurance Industry

The insurance space is a competitive and saturated market. Disruptive and tech-savvy insurtechs are entering the space, with innovative strategies to compete with the incumbents. It’s generally accepted that the insurance sector has difficulty forming close bonds with their policyholders. By and large, insurers struggle with keeping customers engaged outside a claim or a renewal. Since customer engagement is both restricted and superficial, insurance companies are pressed to find new ways to build relationships with potential policyholders and stand out in an already saturated market.

What Do Policyholders Expect from Insurers?

Insurance buyers typically are incapable of differentiating insurers, which means that their decisions center around price alone. Policyholders use reliable comparison sites to find the cheapest deals, which prompts insurers to overly focus this attention on price. 

Consumers now want to be treated as individuals with their own experiences whether they be retired, young parents still in debt, or career-driven professionals.

So, today’s consumers expect personalized products and services from their favorite brands. If insurance carriers can’t come up with a way to meet this growing consumer trend, then they risk losing significant market share to insurtechs that have their fingers on the pulse of consumers. 

Personalization is Key

In order to improve customer engagement, insurance providers should look at ways to provide a wide array of products. In fact, insurers need to find a way to make their products enticing and helpful to all of their customers –  whether they be young parents with a mortgage or retirees who are looking to travel more frequently. 

In other words, policyholders want insurance products that suit their lifestyles and needs.

Customer Segmentation For Better Insight

Generating helpful personalized insurance products and experiences can only be done with insightful customer segmentation. The single most important differentiator in the insurance market moving forward is going to be the extent to which products can be personalized and customer-centric. 

Customer segmentation is the process of separating customers into groups that have the same traits. This allows companies to offer personalized insurance products to various customer segments. By creating personalized products, an insurance company can meet the needs of a wide spectrum of policyholders.

The demand for customized insurance products will continue to exponentially increase. Insurance companies that offer flexible plans that can be customized by all the various customer segments, such as single parents or retirees, will be well-positioned to increase market share. 

Product Configurators

This is where product configurators can give insurance companies a helping hand. Product configurators have helped businesses in other industries to build customizable products.

A product configurator is a software solution that enables users to select various features when customizing their product. A user can be a potential customer selecting risks against which they wish to be insured, or the insurance providers building various products.

Every robust product configurator relies on a fast and flexible rules engine to run. A rules engine defines all the conditions that enable the configuration and pricing of various products.

Summary

Product configurators can give insurance carriers the necessary flexibility to allow policyholders to select personalized products that work best for them. As a result, insurers will see an uptick in customer retention rates and a reduced churn. 

What’s more, insurance providers will have a better understanding of their customer base by analyzing the options which they selected. This will not only help them to innovate products in the future but it will also enable them to create more effective marketing strategies.

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