How insurance providers can use consumer data for social good profitably
As we wrote in Part 1, consumer data should be gathered not to exclude consumers, but to better understand consumers to develop the right products, deliver them via the right channels, and incorporate the products in the right ecosystems.
What are the right products, channels and ecosystems?
Using consumer data to create relevant products
The “right” or relevant insurance products depend on how clear and detailed a picture you can create after gathering as many relevant data points as possible. To create that picture, Resilient has developed a model of providing insurance protections for consumers that starts with a free product delivered digitally, in ecosystems that allow consumers to access protections easily.
General demographic data is easily available, of course. But with the free product, Resilient is able to collect more granular data, which is used to develop specific products to provide coverage to those who typically wouldn’t get any. And they typically don’t receive protections not because it’s unprofitable for insurers, but because the data is not used to to design and deliver products that are cost effective for providers, while being affordable, relevant and reliable for consumers.
Resilient insurance products are developed based on company KPIs and are provided based upon rewards for consumers (e.g. renewing a mobile phone contract), level of engagement (e.g. engaging with a fintech platform), or hours worked (e.g. hours an independent contractor works for an employer).
They are designed to be targeted and relevant. The more relevant the product, the more peace of mind for consumer and effective for provider.
Using data transparency to develop consumer trust
Delivering insurance products through a digitally-enabled platform can provide transparency and develop consumer trust. Some of the criteria Resilient uses to develop its digitally-enabled delivery channels:
- Intuitive platform, easy to navigate, reduce barriers to consumers access
- Clear opt-in terms and policy around data use, communicated in plain language with minimal industry jargon
- Showing we are doing what we promise with the data
- Outreach to communicate changes to data use policies
- Engagement and open lines of communication to work with consumers continuously
Providing protections where consumers already are
When we speak of ecosystems, we are talking about spaces where consumers already are engaging, spaces where we can offer protections in tandem to their current behaviors.
- Contractor work — Within the needs of independent contractors, their industry, type of work and habits, demographic patterns.
- Fintech — Within the array of products offered through fintech, aligned with fintech platform engagement, matched to the fintech needs and behaviors of consumers
- Consumer products — Within the products that can offer add on protections via consumer activity.
United Taxi Management provides a ready example
Resilient’s partnership with United Taxi Management (UTM) offers a good case example of the above.
Because taxi drivers in New York City are suffering financially due to the rideshare economy, UTM worked with Resilient to design insurance products directly relevant to drivers. The products give drivers no-cost insurance protections, and significant insurance discounts for themselves and their families for each month they fulfill driving thresholds.
The no-cost AD&D and significant discounts were made possible by understanding the data we collected on drivers and how we used that data to design a program serving both drivers and UTM. Read the details in Why this NYC Yellow Cab company is giving it’s drivers $25,000 of Life insurance.
UTM drivers are able to access their profiles and policies online. Because we take personally identifiable information (PII) seriously, we encrypt all info, and maintain a robust control environment to build and maintain driver trust.
Because of general consumer distrust of the insurance industry and of data collection, there must be an ongoing commitment to serve customers with affordable, relevant products to deepen trust and mitigate driver fears. But that challenge is overcome steadily as drivers are able to directly access their insurance once they meet their driving thresholds.
Data, consumer resilience and the future
Resilient’s model allows us to use consumer data to:
- design affordable and relevant insurance products;
- deliver them through the channels that make the products easily accessible; and
- And do so for consumers in need, namely the millions of American adults struggling financially. (Check out How do Americans deal with financial emergencies?)
This story is about data, but in the end Resilient’s work is about supporting U.S. households in need, to build their financial health and specifically to support consumer financial resilience.
We agree with the industry leader on consumer financial health, the Financial Health Network (former the Center for Financial Services Innovation) that consumer financial health is achieved “when an individual’s day-to-day financial system functions well and increases the likelihood of financial resilience and opportunity.”
Much has been written about in regards to giving access to savings, credit, and payments, etc, for meeting day-to-day needs. But we believe financial resilience has been overlooked, and is just as important.
Ultimately, that’s what we do: use our data to build insurance products that give consumers the tools to help them withstand financial ups and downs so they can build financial health in the long-term. Read more on consumer financial resilience: The largely ignored component of financial health: Resilience
Learn how Resilient’s Inclusive Insurance programs can benefit your business. Visit imresilient.co, and contact us as Maximilian.Weiner@imresilient.co.
