It is tempting to focus solely on hard data when deciding whether to take an innovative new insurance product or program to market. Indeed, the metrics generated by pilot programs, market research and sales projections are vital decision-making tools.
However, it is worth remembering that some benefits don’t show up as budgetary line items and not all outcomes can be counted in the same way. Some are intangible.
“Soft benefits can have a profound impact on an organization and they should get serious consideration when calculating the return on investment (ROI),” said Brett Jurgens, CEO and co-founder of Notion. “Having a clear picture of these indirect benefits is especially important for insurtech because innovation executives are often up against internal resistance to change.”
Notion, a Comcast company, partners with the country’s leading insurance providers and helps them develop groundbreaking IoT programs. Its smart products are built into innovative policies that offer customers a complimentary DIY smart monitoring device paired with a premium discount from the insurer.
Identifying Indirect Benefits
Here are some questions to help carriers explore the soft benefits of a smart monitoring initiative:
- Will it make customers feel good about doing business with the brand?
- Will it help the brand look more innovative?
- Will it help the agents and brokers who sell policies feel excited and more likely to close a new policy with their clients?
- Can it make the company more competitive in the marketplace?
1. The Speed to Market Advantage
When it comes to launching innovative new technical products, it’s difficult to overstate the importance of getting ahead of the market. Launching a fast-turnaround pilot program provides a wealth of user data, customer feedback and lessons learned that build product confidence. By comparison, brands that wait to see what the competition is doing miss the wave of excitement the new product brings to the market. They also forgo the early data and insights that drive both product decisions and the development of internal processes.
Engaging an expert partner that understands the technology and nuances of the insurance industry is likely to accelerate a program’s speed to market. They bring both lessons learned from similar programs and operational efficiencies that are almost impossible for carriers to develop from scratch within a tight timeframe.
2. Enhanced Data Centricity
If the industry’s future is in the hands of the technologists, then data will be its lifeblood. Hard data about people and how they live in and manage their homes will change the way policies are written. Smart devices provide carriers with a “fly on the wall” perspective that can help underwriting, actuarial, claims and other departments across the organization.
3. Calculating Better Discounts
Reducing the number of claims allows carriers to offer better premiums and discounts to low-risk customers. Smart home monitoring programs pave the way with data gathered by interactive tools. These devices help property owners monitor for issues that might otherwise remain undetected and lead to claims.
4. Empowering and Attracting Top Agent Networks
Innovative, technology-enabled insurance policies give agents something new and exciting to talk about with their clients. These devices are also an upscale customer acquisition and retention tool. In a commoditized market with a strong downward pressure on premiums, these devices offer a high level of product differentiation and premium defense.
5. Getting a Competitive Edge
To develop and maintain a competitive edge, insurance brands must innovate. When they offer customers unique insurance policies that include a desirable smart technology, it positions the brand as a partner for property management and protection. These interactive devices also give carriers new engagement channels that reinforce the relationship, build customer loyalty and generate higher levels of satisfaction.
The ROI indicators generated by the soft or indirect benefits of a smart home program may not immediately impact financial targets. However, down the line, soft benefits offer a multitude of positive, organization-wide returns. Taking a holistic view that includes both hard and soft ROI benefits provides broad-spectrum insights on how an initiative will impact an organization now and in the future.