Insurers: Are you ready to play?
BY INA SHEHU
The gaming industry in the UK is now bigger than sales of music and video combined, totalling some £3.86 billion, according to figures from the Entertainment Retailers Association released in January.
The gaming industry in the UK has doubled in size since 2007, the figures show. From hard-core gamers to those who occasionally play Candy Crush on their mobile phones, gaming is part of everyday life for many consumers – notably millennials.
What does this mean for the insurance industry?
Insurers are acutely aware of the need to embrace digitalisation and embed it into their business models. In a bid to attract and retain customers, insurers are looking to new and disruptive technologies and methods – such as gamification – to make the experience of buying insurance more engaging and customer-centric. Insurance is often seen as a grudge purchase, something consumers need to be sold rather than something they actively wish to buy. Could introducing gamification be one way to make the experience more fun?
What is gamification?
Gamification uses elements of game mechanics and design to influence the behaviour of individuals. This can involve awarding prizes, points or badges, introducing individual or group competitions and scorekeeping, among other things. The idea is to enrich the digital experience and make the offering or experience much more customer-focused. Simply put, it can help turn ordinary or boring tasks – such as filling out an application form, generating quotes, or renewing an expiring policy – into more interesting, fun and interactive experiences.
Gamification also can motivate those working in roles such as sales or customer service to work together for rewards, status and recognition.
Does this philosophy resonate with the insurance industry?
To date, gamification has mostly been used by firms internally, for example in human resources departments or as a way of motivating a salesforce to meet or exceed targets. But there are many potential opportunities for gamification to be used externally too.
For firms that use agents to distribute their product, like many insurers, gamification can be used to motivate those agents to sell products and services that go beyond the traditional. It can be used, for example, to give positive reinforcement for completing product information cycles, issuing policies more quickly or updating customer information more frequently.
For customers too, there are benefits to introducing elements of gamification to the insurance process. Wearable technology can be part of a gamification strategy by health insurers to encourage policyholders to exercise more or eat more healthily, for example. Virtual reality-type games can help give policyholders a greater understanding of the factors that go into calculating their homeowners’ insurance premium. And for motor insurers, telematics can be used to promote safer, better driving.
A great example of this is the Aviva Drive App, which monitors a policyholder’s driving miles and assimilates GPS-based data about the driver’s cornering, accelerating skills. The App gives the driver a score based upon how safe they are. This score then directly correlates to the premium charged to the driver.
Research indicates that gamification can increase customer engagement by making parts of the insurance process more interesting and encouraging them to return. It also can enhance brand awareness.
Insurers can employ gamification techniques to educate customers about products and services as well as to motivate them to make improvements in areas such as health and wellness, safe driving or sustainability. This brings benefits for both the customer and the insurer, in terms of improving risk profile.
Better customer engagement will pay dividends across all groups of clients, but gamification is likely to be of particular interest to those insurers seeking to engage millennials who have grown up with digitalisation and gaming as a part of their day-to-day experience.
To appeal to these customers, insurers need to appear relevant and to demonstrate they understand the needs and preferences of their target audience. Using digital channels, and gamification techniques, to engage with millennials is likely to be a powerful way for insurers to make inroads into this segment of the market.
Insurers are well aware of the need to embrace digital interaction with their clients to attract them and then keep them engaged, interested and loyal. Introducing gaming techniques can be a powerful way to do this. As the late American comedian George Carlin once said: “It is never just a game when you are winning.”