F. Scott Fitzgerald wrote in his short story, The Rich Boy, “Let me tell you about the very rich. They are different from you and me.” Insurance companies are well aware of this, and they are striving to tailor their products and services to meet the demanding needs of this market. How will digital technologies change this market?
When serving consumers in the upper financial bracket (typically defined as more than $1 million in liquid assets), it is extremely important for carriers to distinguish their products and services commensurate with the lifestyle and risk profile of the market it is targeting.
So how does the advent of digital technologies help carriers?
1. Digital technologies help create better product offerings
Insurance companies already offer exclusive products to the “high-net-worth” segment. This includes uniquely customizable coverages limits and sub-limits, compelling deductible options (with incentives for retaining more risk) and dozens of premium credits. Here are some examples of how digital can augment these products:
- Homeowners’ policies tied to Internet of Things (IoT) devices such as smart sensors, security systems and remotely controlled devices help protect and secure high-value property. High-net-worth individuals tend to hold multiple properties, and this will allow them (or their property/estate managers) to control and secure their assets effectively.
- Digitally-linked risk management services bundled with employment practices liability insurance (EPLI) products help manage the risk from claims by staff and contractors. This could include digital tools that help in initiating comprehensive background checks of all staff and contractors hired; and digital training tools on employment best practices and benefits. While companies such as Chubb currently offer these training services through offline channels, digitizing them would be easier access to these resources.
2. Digital technologies improve risk-management and advisory services for insurance
Digital led offerings can also aid in enhancing risk management and advisory services to carriers. Companies like Chubb have partnered with prestigious schools like the Wharton Business School to train their agents in risk management services for the elite. This can be extended to digitally-led training for agents to keep them informed of new products, risk management practices and client relations.
This could also mean digital tools to fast-track certain business processes, such as mobile applications to help appraisers capture, value and document appraisal results. These portal/mobile applications might combine the various services available to them, such as alerts notifying the insured in the event of any security concerns with family or property, while also allowing them quick and immediate access to their insurance agents through live-video support. Another tool might be the use of drones or detection services to retrieve or assess valuable possessions after an accident. (read more on the Baller fine art insurance)
3. Digital technologies help bundle “add-on services”
Add-on services such as concierge services are now common in the financial industry. The American Express Platinum Concierge provides its customer services ranging from buying tickets to planning parties and weddings. There is an opportunity to improve on the delivery of these services with new technologies. For example, mobile applications could allow customers to quickly place requests and track progress in real-time. Big data and analytics can also help service providers pre-empt customer requirements to serve them better – think personalized gift suggestions, gift ordering and delivery for a friends birthday.
4. Digital technologies can help drive exclusivity and enhance the definition of “luxury”
Finally–and most importantly–digital technologies, far from being an entry point to the masses, can actually help enhance the level of luxury around an experience. For example, Burberry, an iconic British luxury brand, used digital to elevate its image. As part of their ‘Runway to Reality’ initiative, they invited VIP clients to key flagship stores to watch the runway show live. Each client was given an Apple iPad that could be used to order products directly from the catwalk.
Scott Fitzgerald was right. The rich are different from you and me. The question is how do insurance companies design and operate the luxury model in the digital age? What are your thoughts? Let me know.