Health, financial, family and lifestyle data are at the very core of the business for life, pension and investment providers (LP&I). These companies require large volumes of data to operate effectively and the larger the quantity of customer data, the higher the potential for relevant, personalized and profitable products and services. However, this requires significant trust on the part of the consumer, and any data breach could be catastrophic to an insurer's reputation.
In this post, the second in our three-part series examining the nexus between trust, data and relevance, We're taking a closer look at what LP&I providers can do to the massive opportunities data, while minimizing the risks.
Insurers score comparatively low on the trust index
Right now, there's a fundamental issue that demands attention . Customers are unwilling to share data with organizations they do not trust. And, as our UK Financial Services Customer Survey (which surveyed 4,500 financial services customers) shows, less than 30% of customers trust their insurance provider.
The answer is simple: do the right thing . Be responsible data stewards, clearly communicate data protection policies and principles and deliver value based on consumer data. Our research shows data privacy is a particular concern for older generations with larger investment potential, so becoming a trusted partner to these customers will reap the largest rewards.
Maintaining the security and integrity of data
In a world where data is being captured, stored, processed and shared at an ever increasing rate, maintaining the security and integrity of your data is a serious challenge. They can be used to provide more data if they are offered genuine benefits when they do so. For example, providing highly-personalized investment products, accompanied by an AI-driven explanation, if a customer chooses to provide additional information ̵
Technology alone is not enough , however. LP&I providers also need to be transparent about how they are using individuals data. Having easy-to-understand data protection principles and offering a range of opt-in policies ensure customers are fully aware of any data-based exchange that may take place.
Richer data boosts consumer engagement
There is a huge upside for providers who can balance the risks and opportunities presented by data. Access to rich data sources makes it easier to spot and adapt to trends in the market ahead of the competition, boosting both the underlying profitability of companies' products and their engagement with consumers. But reputations are on the line for those who get it wrong.
and their customers. In the meantime, read more in 2018 UK Financial Services Customer Survey.