Life insurance: How CLTP approach can help bridge the protection gap
₹5 trillion. Mortality claims accounted for about 12% of the total claim payout. Policies attaining maturity or getting lapsed or even being surrendered constituted 96% of all the claims and 88% of the total claims outflow.
This trend is perpetual causing massive loss of financial protection for customers and business value for insurers. While right-selling may save a portion of policies from getting surrendered, an organization-wide focus is required to stay engaged and relevant for customers. The intent and ability of an insurer to financially protect the customer for lifetime ‘CLTP’ (customer lifetime protection), could well be the solution, we have been looking for.
For this solution to work, three fundamental shifts are required: customer-centric design, analytics-powered targeting and innovation over status quo. Many studies have established that customer-centric insurers outperform their peer on key metrics. A US-based multi-line insurer placed ‘customers’ at the heart of its business model and focused on achieving excellence in the way they are approached, engaged, onboarded, and served.
The results have not been surprising at all – world-class NPS performance of above 70 and 2.4x growth in terms of premium per customer primarily through life-stage focused cross-selling. Insurers in India are also getting bold about their focus on customers with a few of them publishing their NPS scores. These are commendable starting steps.
Building capabilities to measure business performance linked to advocacy is critical for getting shareholder and customer interests aligned. Per a consumer survey, over 75% of consumers were ready to share their personal data for getting customized insurance and reduced premiums. Life
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