Unleashing Customer Insights: SAP CDP for Insurance Companies
The benefits of the SAP Customer Data Platform in Finance Institutes
By Peter Gergen, Solution Architect CX
Welcome to the era of customer-centricity in the insurance industry! To excel in an increasingly competitive landscape, effectively leveraging customer data and delivering personalized experiences is essential. This is where the SAP Customer Data Platform (CDP) comes into play. By centralizing, managing, and leveraging customer data, insurance companies can facilitate personalized and highly tailored customer engagement. In this article, I will explore the benefits of implementing SAP CDP for insurance companies.
I will discuss how this solution enhances customer loyalty, enables the creation of personalized offers, and improves operational efficiency. Join me as we delve into the world of SAP CDP and uncover how it can drive the success of insurance companies.
Well… what are the benefits?
Insurance companies stand to gain numerous advantages from implementing SAP Customer Data Platform (CDP). This SAP solution offers a wide range of benefits that can positively impact their operations and customer relationships.
- Enhanced Customer Understanding: The SAP CDP enables insurance companies to gain a comprehensive and holistic view of their customers. By centralizing and analyzing customer data from various sources, such as interactions, transactions, and demographics, insurers can develop a deeper understanding of their customers’ needs, preferences, and behaviors. This valuable insight empowers companies to tailor their products, services, and communication to meet individual customer requirements more effectively.
- 360-Degree Customer View: A CDP enables insurance companies to capture and integrate all relevant customer data from various sources. This includes information such as customer demographics, insurance policies, claims history, contact interactions across multiple channels, and more. With a comprehensive 360-degree view of the customer, insurance companies can develop a better understanding of their customers and deliver personalized offers and services.
- Personalization of Offers: By leveraging the collected customer data, a CDP can assist insurance companies in creating personalized offers and recommendations for their customers. Based on an individual’s insurance needs, life situation, and preferences, tailored insurance products and services can be provided. This contributes to increased customer satisfaction and promotes cross-selling and upselling opportunities.
- Improvement of Customer Communication: A CDP enables insurance companies to design targeted and relevant communication with their customers across various channels. By understanding the individual preferences, interactions, and communication preferences of customers, insurance companies can deliver personalized messages, notifications, and updates. This contributes to effective customer engagement and a positive customer experience.
- Optimization of Claims Management: With a CDP, insurance companies can enhance the claims management process. By integrating customer data, insurance information, and claims history, insurers can quickly respond to claim reports, track the status of claims, and provide customers with transparent updates. Efficient claims handling and a prompt response to customer inquiries contribute to customer satisfaction and loyalty.
- Data Analytics and Insights: A CDP allows insurance companies to conduct extensive data analytics and gain valuable insights into customer behavior, preferences, and trends. By analyzing customer data, insurers can identify potential churn risks, anticipate customer needs, and continuously optimize their products and services. Data-driven insights can also be used for the development of targeted marketing campaigns and customer segmentation.
- Data Protection and Data Privacy: The General Data Protection Regulation (GDPR) gives customers control over their data. This means that the company must obtain the customers’ consent for processing their data and use the data exclusively for the associated purpose. At the same time, customers have the right to revoke this consent at any time. The Customer Data Platform (CDP) helps the insurance company comply with data protection regulations and respect the customer’s desire for privacy. This is achieved through the clear definition of processing purposes for customer data at the data level and the implementation of purpose-bound processes within the CDP.
SAP CDP empowers insurance companies with customer understanding, personalized offers, optimized claims management, and valuable data insights.
Alright, that’s the theory. How about an example?
Let’s say an insurance company has implemented the SAP CDP and has centralized customer data from various sources, including policy applications, claims history, and customer interactions. By analyzing this data, the company discovers that a significant portion of their customers in a specific demographic segment have a preference for digital communication channels and are interested in additional coverage options for specific life events.
Armed with this valuable insight, the insurance company can tailor their communication strategy accordingly. They can focus on targeted digital marketing campaigns, sending personalized messages to this segment, highlighting the relevant coverage options that address their specific life events. This approach increases the chances of engaging these customers effectively and meeting their unique needs.
Moreover, the insurance company can proactively develop new insurance products or policy add-ons that cater to these specific life events, such as marriage, having a baby, or purchasing a new home. By doing so, they can offer personalized solutions that resonate with their customers’ preferences and increase the likelihood of cross-selling or upselling opportunities.
Consider a customer at risk of churn as another example:
In this scenario, a customer who has been inactive for a period of time initiates an insurance claim. Subsequently, the customer visits the insurance company’s website and submits an inquiry expressing a desire to explore alternative options and potentially cancel their existing policy. This situation presents a clear indication of a potential churn risk, as the customer actively seeks alternatives to their current insurance coverage.
By implementing a Customer Data Platform (CDP), insurance companies can effectively prevent customer churn and maintain customer loyalty. The CDP’s capabilities enable efficient tracking and analysis of customer web activity, swiftly identifying inquiries and intentions. Once detected, the CDP promptly triggers an alert, notifying the appropriate sales representative or team member responsible for customer retention. This real-time alert empowers the insurance company to respond promptly and proactively to the customer’s inquiry and potential cancellation request, ensuring a timely and personalized approach to address their concerns.
Equipped with the insights provided by the CDP, the sales representative can take immediate action. They can reach out to the customer, addressing their concerns and providing personalized recommendations based on the customer’s preferences, history, claims, and needs. The sales representative can offer alternative insurance options that better suit the customer’s requirements, provide competitive pricing or incentives, and emphasize the value and benefits of maintaining the existing contract.
With SAP CDP, the insurance company can effectively reduce churn risk and increase the likelihood of retaining customer loyalty. This proactive and personalized approach not only demonstrates the company’s commitment to customer satisfaction but also enhances the overall customer experience. This example illustrates how the CDP acts as a valuable tool for recognizing customer behavior, facilitating timely interventions, and maximizing customer retention in the face of potential churn risks.
However, what are the potential sources of these data?
SAP CDP combines customer data from all relevant data silos. It can combine data from various sources, including:
- Customer Applications: When customers apply for insurance policies, they provide personal information such as their name, address, contact details, and demographic information.
- Policy Documents: Insurance policy documents contain important details about customers, including coverage information, policy start and end dates, premium amounts, and any endorsements or modifications made to the policy.
- Claims Data: When customers file insurance claims, the company collects data related to the claim, including the nature of the claim, claim amount, dates, and any supporting documentation.
- Customer Interactions: Data from customer interactions, such as phone calls, emails, chat logs, and social media interactions, website interaction, provides insights into customer preferences, inquiries, complaints, and feedback.
- Teams Meetings: Transcripts from team meetings with the customer are condensed using AI and analyzed for sentiment. The results are then used by a Customer Data Platform to classify customers based on attributes like “environmentally conscious,” “critical,” “price-conscious,” or “willing to take risks.” The CDP is the final step in this data processing chain.
- Website and Mobile App Data: Information collected from customers’ interactions with the company’s website or mobile app, including browsing behavior, online quote requests, form submissions, and policy purchases, can be valuable for understanding customer preferences and behavior.
- Telematics and IoT Devices: For insurance products like auto or home insurance, telematics devices or Internet of Things (IoT) devices can provide data on driving behavior, property security systems, and other relevant information that helps assess risk and personalize offerings.
- Data Partnerships: Insurance companies may collaborate with external data providers, such as credit bureaus, government agencies, or industry databases, to access additional information about customers, such as credit scores, motor vehicle records, or property data.
- Third-Party Integrations: Integrations with other systems, such as CRM platforms, marketing automation tools, or data enrichment services, can enrich customer data with external sources and enable a comprehensive view of customers.
By consolidating and analyzing data from diverse sources within the SAP CDP, insurance companies gain valuable insights into customer behavior, preferences, and needs. This empowers them to offer personalized products, improve customer service, ensure data governance and compliance, and make informed, data-driven business decisions.
What comes next?
More about SAP CDP:
- The Added Value of a CDP (Part 1) – Central Data Store
- The Added Value of a CDP (Part 2) – Customer-Centric Focus
- The Added Value of a CDP (Part 3) – Data Analytics, Customer Segmentation, and Audience-Building
- Unleashing Customer Insights: SAP CDP for Insurance Companies
- Unleashing Customer Insights: SAP CDP for Retail