Oct 9, 2020

Insurance leaders turn to behavioural science to improve

McKinsey
Insurance
Behavioural science
Joanna England
2 min
Insurance companies are increasingly turning to behavioural science techniques to improve customer decision making, a new report has found
Insurance companies are increasingly turning to behavioural science techniques to improve customer decision making, a new report has found...

Insurance companies are increasingly turning to behavioural science techniques to improve customer decision making, a new report has found.

Insurance companies are investing more in methods that challenge “choice architecture” according to a new report by McKinsey. The method, called ‘nudging’ is already employed in several corporate areas to improve processes. The use of ‘nudging’ has also been successfully installed to increase sales, raise customer satisfaction and reduce episodes of fraud.

The term ‘nudging’ involves changing the language and information delivery to customers, to improve the context in which they make decisions. Poor choice architecture refers to the behavioural patterns that lead to procrastination or instant gratification, over pathways that will deliver longer-term benefits. Walmart, Morningstar and both the UK and US governments have already employed the use of nudging in several areas.

Nudging in insurance

Some insurers are using nudging techniques in selective areas such as digital solutions, organizational strategy and individual cases. Others have embraced the technique more fully, integrating behavioural science techniques into the core structure of their business. 

Results show that these techniques work well and are easy to implement. For example, a German insurance company experienced a 30% improvement in positive decisions from customers, through more effective prompts, explanations, and discussions with customers. 

However, the report points out that that this method is not being used to its full potential and that behavioural science would be very effective in four areas, namely in sales, product design, claims and ecosystem building. 

Four areas to build on

In product design, managers aspire to design new, simple, understandable insurance products to promote customer trust. When certain ‘nudges’ are in-built, they improve customer retention and satisfaction because they encourage logical rather than emotional decision-making.

In sales, scripted cold-calls from call centres have been reviewed to include phrases and words that create confidence and trust in the customer, as well as pathways that provide faster conflict-resolution solutions. 

In claims, the use of behavioural science improves customer satisfaction in the areas of cash-settlements and repair recommendations.

Meanwhile, in ecosystem building, the report says, “Nudging can be very useful in ecosystems, as participants can refer their customers to relevant partners. Particularly over digital channels, nudges can be easy to implement and personalise—which can make those referrals even more impactful.”

Ultimately, by incorporating these practices into the professional sphere, companies are seeing positive results in terms of customer uptake, satisfaction and loyalty. The future of nudging is already being written and will be a defining factor in the progress of the industry.

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Jun 18, 2021

The Ultimate FinTech & InsurTech LIVE Event

Insurtech
Fintech
live
event
3 min
We release three new speaker names for the FinTech and InsurTech virtual conference that can’t be missed, streaming live from London

From October 12th-14th, 2021, BizClik’s FinTech & InsurTech event will bring together influential executives from around the world. Streamed live from Tobacco Dock, London, this three-day event will be an excellent way to finish the year strong, gaining the confidence your company needs to move forward into the future. 

With keynote addresses from global leaders, dynamic roundtable discussions, and extensive networking opportunities, FinTech & InsurTech 2021 will expand your network, deliver insight, and enhance your organisation’s reach. 

Already confirmed speakers include Colin Payne, VP & NextGen FS Global Lead at Capgemini; Dipu KV, President and Head of Operations & CX at Bajaj Allianz General Insurance Company; Bryan Caroll, CEO at TNEX; and Lucy Demery, Managing Director at Barclays.

The event will include:

 

  • Keynote addresses from respected industry leaders
  • Dynamic live roundtables (inc. Q&A)
  • Fireside discussions
  • Inspirational Speakers & Presentations
  • Extensive networking opportunities

 

 

Meet the Speakers

Each week, from now until the event, we’ll be announcing the latest speakers who are set to grace our physical or virtual stage, prepared to share their knowledge and insight with attendees. 

Our second batch consists of:

 

Scott Abraham

Currently the Senior Vice President of Business Development & Fintech for Mastercard UK & Ireland, a position he’s held since 2014, Abraham describes himself as “a proven and successful senior sales leader with experience across a wide range of industries, sectors, and channels.” 

Graduating from the University of Northampton in 1994 with a BA in Economics and Law, he worked for nine years at Sainsburys - eventually responsible for banking the company’s revenue and running its ATMs - and then Barclaycard for three years as Head of Client Management. In 2007, Abraham became VP of Client Management at American Express, and then VP and GM Global Supplier Relations EMEA in 2012.

In his current role at Mastercard, Abraham is accountable for the acceptance of all payments and products through all channels, devices, and technologies across UK and Ireland. In addition, he oversees the deployment of innovative new payment tech within the region.

 

Alistair Fraser-Hawkins

Fraser-Hawkins’ role as CEO, UK Corporate, at Marsh McLennan is the continuation of a long and successful insurance career, which has included being London Sales Director for JLT Group and Branch Director for Willis Towers Watson.

Marsh prides itself on being a company that hires top-tier talent, does work that impacts peoples’ lives, and offers its employees the opportunity to make a difference. This is clearly an attitude that aligns with Fraser-Hawkins’ own values; regarding the insurer’s UK Young Professionals initiative, a support network to help young professionals in their development, he said:

"I am passionate about developing talent and our Young Professional CRG provides a brilliant community for our Young Professional colleagues to discuss key issues relevant early in their careers, as well as an environment to promote the skills, learning and network for success."

 

Mike Massaro

Massaro is currently the CEO of Boston fintech Flywire, a role he took on in 2013. He first joined the team in 2012 as VP of Business Development, but it wasn’t long before his entrepreneurial skills were redirected to leading the entire company’s high-growth strategy worldwide.

An expert in domestic and international payments and billing, enterprise technology sales, strategic alliances, enterprise software, SaaS, product management and marketing, and much more, Massaro is a consummate finance professional whose credentials befit the leadership of a prominent global payments fintech.

His previous positions include Consultant at PwC and Product Line Manager at Oracle, and he maintains a Mentor role at startup accelerator MassChallenge. He graduated magna cum laude from Babson College with a BS in Information Systems and Finance.

 

This event is set to be one of the year's most unmissable. If you want to get leading perspectives on the future of fintech and insurtech, go to Eventbrite and purchase your tickets now.

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