Taking a new view of insurance “now” vs “later” can support consumers while opening a business opportunity to cultivate customer loyalty
As promised in our last piece Insurance → Financial Resilience → Financial Health, we’re diving deeper into how Resilient’s Inclusive Insurance model focuses on the resilience gap in consumer financial health, and — by removing prohibitive upfront costs — provides consumers access to insurance so they can plan “now” to be prepared for “later”.
Focusing on “now”, “soon” or “later”
Insurance products are always designed for “soon” and “later”, never for “now”. Consumers pay up front to receive protections against potential challenges (health, accident, etc.) in the near or far future. The trouble with this approach is that it creates a financial gap that:
- Deters low- to moderate-income (LMI) consumers from investing in insurance; and
- Prevents insurers from doing business with potentially 57% of American adults who struggle to attain financial health and can’t afford the upfront costs of insurance.
For LMI consumers, spending is always dictated by concerns for the now (rent, food, bills, etc.). Their limited financial resources make it difficult for them to plan ahead financially or make investments for the future, such as investing in insurance.
Simply, LMI consumers can’t afford insurance and as a result they go without protections that improve their financial resilience. At the same time, by requiring high premiums, insurers lose out on potentially millions of customers. So how do we include the millions of LMI consumers in this essential part of financial resilience? By removing the cost barrier.
Businesses can step in and close this access gap by taking on the “now” payment aspect/component in return for customer loyalty and brand equity.
This is the Inclusive Insurance model. Inclusive Insurance refocuses the traditional model so that insurance can:
- Remove prohibitive upfront costs;
- Provide greater consumer access;
- Help consumers become more financially resilient; and
- Give businesses the ability to use insurance to earn customer loyalty.
Insurance is always “soon” or “later”
Businesses and employers tend to view insurance products like health, dental, and auto as necessary for the immediate future (“soon”), and life insurance, AD&D, and long-term disability for the distant future (“later”).
With this “soon” or “later” view, what they do not see is that all insurance can be used as a tool for “now” to support consumers in the present, if the products are made affordable and accessible. But more often than not, the product designs are prohibitory, establishing premiums accessible only for those who can afford to keep paying high prices over time.
These companies take this view for many reasons, not least of which is because this is how insurance has always been designed.
But LMI households tend to see insurance differently. Their view is determined by the answer to a simple question: Can they afford it now?
Often the answer is no, and consequently LMI consumers tend to think of all insurance as something for “later” or “never”.
If the industry is going to help LMI households become financially resilient, businesses need a new insurance model that addresses the most important consumer pain point of insurance: “I have all these bills to pay, how can I justify spending on something that I won’t need until later, if ever?”
Inclusive Insurance helps consumers access financial resilience now
The Inclusive Insurance model is powered by the Resilient platform. It enables companies to offer insurance products to their customers at no-cost, with additional products that are affordable, relevant and appropriate.
The model consolidates the power of insurance to invest in financial resilience in the present, immediate and far future, so that when consumers ask, “Can I afford it?” The answer is always yes.
How can these products be offered at no-cost or deep discounts? Resilient partners with companies to offer these products in exchange for behaviors that drive revenue, improve customer loyalty, attract new customers, and increase customer engagement.
Resilient’s Inclusive Insurance model
Customized for each industry and company, Resilient’s Inclusive Insurance programs can be offered to incentivize 1099 contractor workers to deliver consistent and quality work; to encourage platform engagement on a fintech app, for example; or to reward customers for their brand loyalty.
As one example, Resilient’s partnership with United Taxi Management (UTM) provides cab drivers with needed insurance protections, paid for by UTM to invest in the integrity and quality of their revenue-generating workforce. For more details, read this case study.
The no-cost and discounted insurance products are just the beginning. As companies partnering with Resilient gather data on what their employees and customers do with their insurance, and what specific needs they have, additional insurance products can be offered to advance corporate goals with a socially responsible design.
Essentially, Resilient’s Inclusive Insurance model flips the traditional model on its head. The traditional model start with statistical risks and biases regarding insurees’ behaviors and then develop products with prohibitory costs and limited access.
Resilient’s platform model offers initiatory products first, and then gathers data to develop products after data from actual behaviors and needs has been assessed. This allows for relevant and accessible products to serve corporate goals and allow consumers to build financial resilience immediately.
Resilience now for consumers
As recent studies on the impacts of insurance shows, insurance products like Resilient’s can go a long way in supporting consumer financial resilience. Having insurance opens up opportunities for consumers to plan for financial goals that go beyond pressing needs like rent and groceries.
With support from insurance products, they can use their savings for down payments on important assets like a home, or pay off debt faster, or build more savings for large purchases like college tuition.
Resilience now for businesses
By investing in insurance products for their consumers and providing them at no-cost, companies open up new opportunities to build and grow their business. Inclusive Insurance can be effectively used as reward incentives to generate customer loyalty.
Using rewards and perks to cultivate brand loyalty has been growing over the decades, and the data makes it clear that they work.
To cite just one example, as Business Insider reports, “79% of customers cite rewards as the top reason they choose one card over another. Providing robust perks that touch all kinds of spending could help firms boost top-of-wallet status.”
Offering no-cost Inclusive Insurance in exchange for a mobile contract renewal, or for certain levels of use on fintech apps, or for hours of contract work can develop a dedicated following of customer engagement, creating “stickier” long-term customer relationships.
And even going beyond a “give-to-get” exchange, rewards can also develop customers’ emotional reaction to your brand.
“When companies connect with customers’ emotions, the payoff can be huge,” the Harvard Business Review reports, discussing the power of companies inspiring customers to connect a wide range of emotion with their brand.
“Feeling secure” is one emotion they list as one that can make your customers associate with your brand, a belief “that what they have today will be there tomorrow; pursue goals and dreams without worry.”
Designed to provide resilience for building business and for consumers’ lives, Resilient’s mobile-enabled platform delivers Inclusive Insurance programs customized for every partnership.
Learn how Resilient’s Inclusive Insurance programs can benefit your business. Visit imresilient.co, and contact us as Maximilian.Weiner@imresilient.co.
