Banks Use Data To Serve Right Place, Right Time Insurance Offers To Consumers

“It’s been exciting for us to watch the disruption within the insurance industry with respect to the advanced technology being offered through the InsurTech space,” Liz Sheehan, group vice president of Carrier and Product Management at Franklin Madison, told PYMNTS in an interview.

Those upstart firms have been able to put together analytics and a user-friendly interface to re-shape what has traditionally been a clunky and complex application process.

Sheehan said that thus far in 2021, banks and other financial institutions (FIs) are having success with insurance as part of their embedded flows and product offerings to end consumers — and that success runs the gamut of credit unions (CUs), large and mid-sized banks, as well as mortgage companies.

“What’s different from past years is that many are taking the time to invest with partners in the integration of insurance within the overall banking customer experience or journey … and particularly within the lending experience,” she noted.

Pivoting Toward Partnerships

Relevant insurance coverage can be offered at the point of contact, said Sheehan, with the help of advanced technologies — and increasingly interested partners. In one hypothetical example, homeowners insurance can be offered when a consumer is actually getting their mortgage in place.

There’s also been an uptick in offering life insurance through digital platforms, where the financial advisor and the consumer can access and discuss a broad suite of life insurance programs — “and they’re seeing it at the same time,” Sheehan said.

Most banks, especially larger ones, have insurance agency infrastructures to offer products to their consumers.

“But insurance is heavily regulated and requires unique expertise in the products and in consumer guidelines,” Sheehan told PYMNTS. “So, we see most banks partnering with a company to offer the insurance programs or solutions that they want their consumers to see, whether it’s life insurance or home or auto or supplemental health insurance programs.”

Thus, the experience of purchasing insurance within everyday banking activities becomes intuitive.

As Sheehan pointed out, insurance is rarely the main reason that consumers engage with their bank or CU, but it’s clearly important for their financial security.

“The best financial institutions recognize this, and they ultimately integrate the insurance along the consumers’ journey related to core products,” she said. “Or they’ll use it as an accompaniment when a consumer completes a primary task, perhaps on a banking website, for example. That becomes the trigger for an insurance offer.”

The introduction of automated underwriting processes — from not only the insurance carriers, but also the re-insurers and InsurTechs — has helped enhance the customer experience. Better data collection (and a plethora of data points) means that FIs can target their insurance customers more effectively.

“Ultimately, this should result in a higher approval rate, which means more people are able to obtain affordable life insurance policies,” noted Sheehan.

The use of data, statistical algorithms and machine learning (ML) can help power databases such as Franklin Madison’s, which has decades of marketing campaign results and response histories that can help craft and optimize new campaigns. The goal, said Sheehan, is to offer the right product to the right person at the right time across the most suitable channel, with innovation as a critical hallmark of the process.

Pointing to her own company, Sheehan said that Franklin Madison has been able to help FIs identify and focus on “gaps” in life insurance coverage. Beyond life insurance and accidental death and dismemberment policies, there really had not been policies in place that helped protect consumers while they were recovering from injuries — and Franklin Madison has introduced such coverage through partnering with carriers.

“Benefits are coming back to you, and you can determine how to allocate that to your recuperation,” said Sheehan.

At a high level, she said, the bank remains a trusted confidant from the consumer’s point of view.

“If it’s the financial institution that is bringing the insurance offering, there’s a higher likelihood of the consumer making that insurance purchasing decision,” she told PYMNTS.