Gamification: Fueling Sustainable Growth in the Insurance Industry
In the business world today, customer engagement mandates creating emotions associated with real-life situations. Rapid changes and innovations are making forays into the insurance industry to make this a reality. Gamification stands at the nexus of such trends. Emerging technologies like self-service portals powered by Artificial Intelligence, Machine Learning, and Deep Learning have been trying to peek into the customers’ minds but, when it comes to influencing customer behavior, there is still a long way to go.
Gamification goes a step further by applying game-design thinking to non-game applications, making them more fun and engaging. It focuses on enriching digital experiences and creating several other customer-centric business models to capture customer attention. Unlike other customer engagement portals, gamified self-service portals bring fun and energy to an otherwise tedious business process. However, they collect valuable customer data in the process, using a range of appealing gaming techniques for realizing lasting business value.
Gamification in Insurance: On the Path to Maturity
Gamification in insurance is not a new phenomenon. It has been around since 2014. However, with the digital boom in 2017-18, it has begun to pick some pace. It has shown insurers a way of transforming an ordinary business task into an extraordinary process. A few insurance carriers have already tasted the tangible benefits of better customer engagement and its related business benefits. However, acceptance in the overall industry has still been sporadic.
Widespread Impact of Gamification
Gamification offers great potential value in the realm of customer engagement. It has emerged as an effective practice to transform ordinary tasks into rich and fun experiences that build customer loyalty and drive repeat purchases. It exposes the customers to the severity and impact of the risk and hence the need for insurance to protect against any unforeseen circumstances. In addition to the customers, the insurance carriers also benefit from gamification. The detailed data provided by the customers will help them in customizing their offerings, which results in improved underwriting, pricing, and ultimately better risk mitigation. The broad categories around the impact of gamification in the insurance industry can be illustrated as below:
How it Works: An Instance in Point
If we consider a typical insurance policy purchase process, we are aware that the subject matter can be insured against various risks using different insurance products that are available in the market. However, customers usually struggle with determining which product suits their needs best. They also like to refer to those products that similar customers had purchased earlier. The role of agents and brokers actually helps the customers in choosing the right product and the right level of coverage at a good premium.
Gamification, however, turns the whole purchase process into a dynamic one. With the help of gamification, customers can easily compare the risk and the level of coverage among the carriers without any agent/broker intervention. This kind of data-driven insight will help the customers in quickly determining the most appropriate product and completing the purchase. Insurance runs on the concept of 'Law of Large Numbers' and hence, having a clear idea of what others have done in similar circumstances plays a big role. In addition, gamification can provide a detailed insight into the specific coverages that need to be selected to cover a particular risk exposure.
In Insurance, the potential for over-insurance or under-insurance impacts both the premium payment as well as the indemnification phases of a policy journey. Over-insurance leads to a higher premium payment than needed whereas under-insurance leads to inadequate insurance coverage. Hence, selecting the right sum insured is mandatory for appropriate risk coverage. Gamification can provide the needed insight on that aspect as well, which will help the customers to avoid eleventh-hour surprises when the time comes to file a claim.
Benefits of Gamification
There are several benefits that can be realized by implementing a gamification model in the insurance industry. The gamut of benefits runs from increased engagement, uptick in customer loyalty, higher brand awareness, to enhanced customer satisfaction.
Gamification offers the kind of experiences that agents and customers demand and also provides them an opportunity to stay engaged. This is especially true for millennials as frequent interactions and richer experiences are quite important to them. Gamification provides insurers a way to show that they quite understand the need and preferences of the millennials. It also helps them present a more positive and compelling value proposition.
The experiences of early adopters should encourage the ones interested in leveraging gamification. It has clearly been exhibited that tangible returns can come from relatively limited investments and focused pilot programs. The fact that early adopters have moved on to fully operationalize gamification makes it evident that gamification is here to stay for the insurance industry. Gamification is closely associated with customer centricity and engagement, which are the insurance sector’s most pressing imperatives. This makes gamification an essential play for the carriers to be in.
About the Author
Vikram Singh works as an AVP, P&C Business Advisory Specialist for insurance. He is a Business SME, bringing over 20 years of rich exposure in successfully executing and designing insurance solutions for various clients across the globe. His vast insurance domain expertise along with in-depth experience of a variety of insurance products has been instrumental in bringing quality, innovation, and earning client confidence in the project deliveries.