Hyper Personal Personal Insurance
Updated: Jan 5
I have seen a few articles recently that have focused on and/or were titled "Hyper Personal" Personal Insurance. Like lots of things, it does not sound that good to me, but a creative marketing person has probably discovered this phrase sounds good to consumers.
The idea is that someone or something, not necessarily an agency or even a person as it could easily be a software program, will hyper personalize a consumer's insurance experience relative to identifying their insurance needs due to changes in life and lifestyle. It sounds good.
But, good agents have been and are already creating personalized insurance plans for their clients. They are staying in contact with their clients regularly so they already know of their life and lifestyle events and make coverage recommendations accordingly. The fact that investors are spending millions of dollars on the creation of automated software to do this, are capturing headlines, and even more investment dollars speaks to the fact that most agents are not doing their jobs well or at the very least, they are not being recognized for doing their jobs well.
Software has additional advantages. First, no discipline is required. Program it and run it. No one needs to remind people to do their jobs. (That said, quite often the problem is exacerbated by a lack of procedures and quality job descriptions, so staff often have no specific instructions to be more proactive.) Second, the building of software is paid for by investors and comes off the balance sheet. In these days of relatively easy investment money, that money is considered by many to be cheaper than money expended on the income statement. Employees' salaries are paid and accounted for on the income statement. Furthermore, once the software is built, beyond maintenance, it is paid for. Employees always need that next paycheck and are more expensive than software (potentially and depending on the software model).
The offset is better for good, professional agents, however. The most "hyper" personalized insurance is made possible by simply talking to the insured and learning what exposures they have to cover. Building a program to identify when it is time to sell someone a second policy or to send out a birthday card are superfluous to the client's actual needs. The best service a professional agent can provide, the most personalized service a professional agency can provide, is to identify which coverages are truly needed and then discuss those coverages with the client.
Matching coverages and exposures is tough work. The software companies promising hyper personalized service are not dealing with the fact that most customers do not even know what their exposures are. I cannot begin to tell you how many agents, much less their clients, do not understand the true value of high UM/UIM limits. Many retirees who have paid off their homes do not understand why they should maintain a homeowners policy -- for the liability coverage if for nothing else!
Millions of different combinations of homeowners policies exist, just using basic endorsements and ignoring varying policy limits. Then consider all the different forms. No single family should ever find themselves with the same coverages as any other family if the agent does their job well.
The choices are binary. Try and compete with new players who have better marketing, better software, better advertising, and ultimately lower expenses without offering the personalized experience clients truly need. You will lose. Or, become a true professional and personalize the customer's experience in the most valuable manner possible and hit the jackpot! What choice will you make?
NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.