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A new dawn of personalisation is on the horizon

12 September 2018Jonathan Faurie
Volker von Widdern, CEO of Constantia

Volker von Widdern, CEO of Constantia

One of the new catch phrases in our industry is that insurers and brokers need to become hyper relative in the eyes of their clients. Hyper relative (or hyper relevance) is the practice of becoming closer to clients to monitor their risks and needs. Insurers and brokers can then communicate these needs to clients before the client draws attention to them.

Hyper relevance comes with its own challenges and opportunities. We spoke to Volker von Widdern, CEO of Constantia, and John de Bruyn, Head of Marketing at Constantia, to find out how easy – or difficult – it will be for insurers and brokers to be hyper relative. 

Changing outlook

For many years, the insurance industry operated off the basis that brokers would sit down with clients, do a risk assessment or financial needs analysis and then recommend a product to a client that will best suit their needs. 

If the broker represents a large insurer, the client will become part of a large client base that would be serviced by the insurer. While this cover is valuable and has catered for the needs of clients for many years, the relationship can be described as impersonal. 

However, the client of today wants to interact with their insurer and show them that the cover that was offered in the past may not suit their current needs. There is also a major push for insurers to offer bespoke products. This is where hyper relevance shows its true potential. 

“As a client, being just a number in a large corporate is the norm. However, this is changing. Clients want to place trust in a relationship and serving the client's needs to the best of their ability is how insurers build trust,” said De Bruyn. 

Von Widdern pointed out that hyper relevance will give insurers an edge because the client engagement model is changing from periodic, calendarized interaction, to much more fluid and proactive engagements.  

Opportunities and challenges

While hyper relevance would mean that brokers would have to interact with their clients on a more frequent basis, there are some demonstrable advantages associated with this. 

The key advantage is that brokers will be able to personalise their advice whereby they can offer clients key insights that robo and direct advice models cannot. 

“The advantages of hyper relevance should be available to clients, brokers and product providers. This means that products should be more versatile, advice can be framed in context of variable behaviour, and clients don’t need to worry about declarations being made in fine detail and being updated only when they meet with their broker on a yearly basis. Hyper relevance is particularly advantageous when it comes to smaller sums insured,” said Von Widdern. 

While there are certainly a lot of opportunities associated with hyper relevance, there are some challenges that need to be managed along this journey. 

“Finding innovative risk solutions for clients will need to be done in collaboration with available data. The accurate analytics of this data needs to be applied to find and present innovative risk solutions. This is not negotiable,” said De Bruyn. 

Focused engagements

For smaller and boutique insurers, hyper relevance means that insurers will be able to gain access to client insights on an unprecedented level. However, larger insurers – who traditionally have large books of business – may find being hyper relative challenging. 

“It is difficult to deploy hyper relativity in large client portfolios, or across substantial networks. The new engagement models will require specific consumer education plans, and consistent deployment,” said Von Widdern. 

This does not mean that it cannot be done. De Bruyn added that large insurers can accomplish this with the correct partners that share the passion to find the balance between being hyper relative and achieving success and scalability. “There is always a tipping point looming. It's a fine balancing act,” said De Bruyn. 

The cost factors

A recent survey that was undertaken by a major insurer pointed out that clients see insurance as a costly exercise and point to the cost factor as a reason why they are underinsured. 

Will hyper relevance add to the cost of insurance making it impossible not to preclude certain clients? 

“Cost is not always a problem, particularly if the client values a comprehensive service package. Low cost models are available in the hyper relative context because the engagement can be tailored to the exact needs of the clients. The traditional, highly detailed risk inception and claims processing models are likely to be disrupted by hyper relative, individualised models which will mean that more clients can potentially be insured,” said Von Widdern. 

Editor’s Thoughts:
Hyper relevance is a model that is exciting for insurers and brokers alike. It personalises advice and highlights the importance of a broker as a valued risk partner. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

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