Can insurance really be gamified?
One of the by-products of the ongoing technological revolution is an increasingly savvy shopper. This new breed of ultra-engaged consumer is using a host of online tools to have conversations about brands, rather than with them. This is especially true of the highly competitive global insurance market which, thanks to innovations such as online forums and price comparison websites, is feeling the squeeze more than ever.
This is one of the many reasons why insurers need to start emulating consumer brands in their fight to retain customer loyalty, and why in particular they should look to adopt one of the hottest trends in consumer marketing: gamification.
Gamification – or the use of traditional game mechanics to engage users outside of the traditional gaming environment – is now almost a standard technique used by brands across the retail sector. From Starbucks offering its customers rewards for checking into stores via Foursquare to DropBox offering customers more online storage in exchange for completing various tasks, more and more brands are using the tactics more commonly seen in video games to interact with customers.
Rewarding shoppers for checking into coffee shops is a simple, even obvious, application of this trend. But why isn’t this concept being used more in insurance? If insurers can engage consumers by rewarding them for driving more carefully or setting their alarm when they leave the house, surely it’s a win-win situation for both parties?
Insurance is traditionally a necessity purchase. Consumers rarely interact with their insurer unless they either need to renew their policy or make a claim. However, consumers now increasingly want to understand the value they receive from services. This is having a direct effect on insurers, particularly around how they offer more value than their competitors.
We’re beginning to see the green shoots of this appreciation for the new consumer in the rise of telematics. It is not hard to see the leap from pure telematics to a gamified form of the technology where acceleration, braking and cornering are measured and “prizes” in the form of discounts or gifts awarded for better drivers.
This technology exists now, and with the introduction of the European eCall directive we will see a form of telematics in most new vehicles by the end of the year. From there it is not hard to see insurance companies begin to start partnering with commercial loyalty schemes such as Nectar in the UK to offer discounts and incentives via other purchasing decisions.
Insurance is now more than just a transaction. Thanks to a new generation of engaged, informed consumers it is evolving into as much of a life choice as buying a car or new TV. As such, the traditional insurance product now comes with the need to ensure that it adds real value to the consumer, and not just sits as a static purchase on a yearly cycle.
The problem is that currently these initial steps into gamification are being taken by smaller, niche players rather than tier one insurers. Customer loyalty is the new frontline of competition, and relationships need to be managed more closely than ever to ensure that loyalty is embedded into the buying cycle from day one.
The days of insurance being vendor-centric are over. The future-ready insurer needs to offer excellent customer service solutions that are as focused on engagement as they are retention. Gamification and other similar technology-based techniques not only allow insurers to engage with consumers on a new and more personal level, they also open up new channels of communication that can ultimately be converted into both loyalty and brand advocacy.