Identifying banca customer segments
Note: This is the third entry from a seven part series looking at what options insurance executives have to increase the penetration rate of life protection via bank channelss. To see other posts please go here.
For life insurers, banks’ extensive captive customer bases are the primary attraction of securing a distribution arrangement. Optimizing penetration of these bases means developing effective, proactive ways to identify warm leads (i.e., customers with the highest suitability for standalone protection products).
Sifting through the many thousands (sometimes even millions) of customers in a typical retail bank’s database can be a daunting task, frequently complicated by each customer’s unique wealth, protection and biometric risk profiles. To ensure a proper return on:
- The investment in securing the distribution agreement
- Acquisition costs, associated with bank commissions, and policy infrastructure development
For insurers, the key to optimizing penetration of their bank partner’s customer base is proactively identifying those individuals with the highest propensity to buy the products offered and the lowest propensity to file claims.
At a South East Asian bancassurer, protection conversations focused on the entire high-net-worth customer cohort, resulting in a conversion rate of only 0.7%. When the insurance partner specifically identified and then focused on the bank’s affluent and mass affluent customer cohorts, the conversion rate tripled.
Many tools exist, from predictive models to customer outreach campaigns, are available to insurers to determine suitable protection product customers. These customers can then be targeted for specific solutions that would most likely meet current and projected risks and needs. In some situations, customers can be pre-underwritten, which can reduce acquisition costs and minimize the sales pipeline leakage that occurs during traditional underwriting.
As always, welcome and thoughts, perspectives, and comments.
The full report can be found here
Kind regards,
Farron