Smart data and AI use can ‘nudge’ customers to better offers

In the digital age, we’re increasingly comfortable trading our data for some sort of reward or gain. In a recent Roundtable interview, our CEO Angus McDonald, told that embedded offers, and nudging consumers toward what they need, at the right time, can pay dividends to all involved.

Consumers, particularly millennials, have shown a strong interest in transaction-based insurance offers and a recent survey showed 45% of US consumers interested in receiving insurance offers from their banks with convenience as a main driving factor behind it. Many believe that banks and financial institutions have gotten it wrong to provide the opportunity to distribute these offers but Angus believes otherwise. The main problem is with traditional insurers; they haven’t been able to bring a technology-led focus to this opportunity and aren’t bringing platforms or solutions for digital or traditional banks, despite customers of these banks clamoring for it. 

“What we see a lot in traditional insurers is that they’re completely reliant on the second step,” Angus highlights, i.e. the step that connects a customer from a banking website onto the insurer’s website to get a quote or to purchase insurance. The problem with this is that as soon as a customer is taken out of a website they trust to an unknown website, they simply are not going to complete the second step. 

This leads to a global issue of being underinsured. Most bank customers want their transactional data to be leveraged for relevant offers, according to a recent survey, however most people are underinsured because people find it too hard to buy insurance in the first place. Banks and financial institutions have the opportunity to eradicate a large structural problem and embedded insurance tech companies are leading the way in this field. 

The primary reason end customers are looking for transaction-based offers is convenience, driven by the relevancy of the offers. Traditional insurers haven’t been able to leverage data sets because they don’t have the platform to deliver solutions. Embedded insurtech companies like Cover Genius are able to distribute products across all verticals and leverage AI and machine learning (ML) programs to create personalized insurance products. AI and ML are absolutely key to achieving this, but having a platform is crucial to delivery the right products to the right customers, at the right time. 

Banks and financial institutions are very well placed to incorporate embedded insurance products because they’ve got customers who are clamoring for it. The opportunity to provide relevant offers will allow banks long-lasting value from recurring revenues and importantly, they’ll receive engagement from their customers.

Key Video Highlights:

  • 0:34 How does trust play into transaction-based data? 

    4:25 Millennials have shown a particular interest in transaction-based insurance offers. How do banks and FI get it wrong? 

    6:50 Are digital banks aware of the demand for different high-risk products?

    9:29 There’s demand for non-traditional products, what trends are you seeing?  

    11:37 Can you tell us the best, most ethical way to use data and smartly ‘nudge’ people to where they should be going? 

    14:29 How does the conscientious ‘Nudge’ theory play out for the banks? 

    17:35 How do you navigate whether customers determine between a “nudge” or if it feels like a “nag”? 

    21:25 What does Cover Genius do to balance the helpful and the intrusive in terms of insurance? 

    26:00 What triggers the desire for the contextual “nudges”? What makes them interested in transaction-based offers? 

    28:13 Why are millenials so interested in bank based coverage offers, contextual offers that have yielded good results?

    33:23 Let’s go around and answer what you’re doing and what you’re hoping to achieve by using AI to put more targeted offers to consumers?