The insurance market is changing rapidly. Customers increasingly expect services that incorporate smart technology. It is a force moving insurance companies into new territory – the world of smart technology.
“Launching a smart tech insurance product is different from any product a carrier has developed before,” said Brett Jurgens, CEO and co-founder of Notion. “To improve the chances of success, carriers need to work with a partner who knows the technology sector and understands the nuances of the insurance industry. Our phased approach ensures partners can justify the product’s evolution from pilot to scale to extending it to other user groups and policies.”
Notion, a Comcast company, partners with top insurance brands to develop innovative new products that incorporate smart home devices. Programs are designed to meet strategic goals such as customer acquisition, retention and claims reduction. The company’s phased rollout has helped insurance carriers bring insurtech policies from idea to scale quickly and smoothly.
What is a Phased Rollout Framework?
Success depends on a managed approach to building leadership confidence and user adoption based on program data and success metrics.
As smart device programs mature, they offer an increasing depth of business intelligence. Taking a stepped approach using the phased framework allows companies to concentrate on gathering the right information at the right time.
During the initial phase, carriers can set focused targets for the program to show traction and customer receptiveness. As the program expands to more policyholders, the carrier can work with the partner to optimize and share customer insights. This phase, which is designed to quickly show program potential, is known as the pilot phase because it is offered to a targeted group of policyholders.
Next, in the scale phase, the program is offered to more policyholders and carriers can then turn their focus to more in-depth analysis of the program data and impacts on their business. The scope should be prioritized and directly aligned with the program’s strategic objectives. In this phase, carriers can expand the metrics and start to analyze longer-term benefits from the program by, for example, correlating the relationship between sensor placement and the reduction in insurance claims across perils.
While the scale phase is ongoing for the program’s life, the third phase begins when the carrier expands the program to other policyholders such as renters or small- and medium-sized businesses (SMBs) and introduces third-party partners and other enhanced offerings. This is the extension phase.
The phased framework provides carriers with an effective way to plan and track how the program impacts customer lifetime value. By allocating specific goals to each phase, the framework allows carriers to focus on the metrics they need before proceeding to the next level.
Phase 1 (~3 months)
Pilot – Showcase program potential
During this phase, the focus is on customer installation and proving the program’s potential of the program through customer adoption and feedback. Metrics include the customer acquisition cost (CAC), product installation rates, agent engagement levels and investment costs.
This is an opportunity to test assumptions and program variations. For example, what communication tactics do policyholders engage with more? How does the premium discount validation and implementation work best?
This phase is targeted at a small pilot group and should deliver the necessary data in a matter of months, allowing the program to move up to the second phase quickly.
Phase 2 (Year 1)
Scale – Begin mainstream rollout
During this phase, the program is launched to full scale and offers the opportunity to gather more insights and impacts to the business. At this phase, the program and policyholder discount should be built into the policy management system.
Carriers can also start to expand the offering to include other products and services. For example, offering professional monitoring can help expand peril coverage, could unlock supplemental policy discounts and may provide additional revenue streams for the carrier. These value-added products can also help reinforce the relationship and engagement between the policyholder and carrier.
At the business level, correlating sensor event data, such as water leaks, with claim data validates the program’s ability to reduce loss ratios and provides opportunities for the carrier to start tracking risks dynamically. For example, knowing where homeowners place sensors may indicate their concerns and risk levels per peril.
Phase 3 (Year 2+)
Extension – Broaden applicable policyholders, use cases and services
Once the program has proven its initial value, it is time to consider how to expand these devices to other policy types, markets and use cases. Small- and medium-sized businesses and renters face many of the same issues and risk areas as homeowners.
As this phase is primarily focused on expanding the impact of the smart device program, carriers should consider working with a partner to develop third-party offerings to help policyholders become better stewards of their properties..
For example, through Notion’s partnership with Cinch Home Services, a tailored home warranty and water protection plan can be offered to policyholders. Homeowners can have protection against breakdown and failure of home appliances and systems such as HVAC as part of the program — another step to a more connected and protected home.
Launching radically new products in a competitive market takes confidence, commitment, rapid testing and careful planning. Those carriers that lean on a partner with expertise in insurance and technology are most likely to see a fast and robust return at every stage of development. By strategically breaking a program into logical phases, carriers can prioritize and focus on what matters at each stage of the customer journey.