How to retain life and health insurance customers

November 1, 2024

Customer retention is a critical focus for life and health insurers, who must now navigate an evolving market landscape characterised by increasing customer expectations. Providing personalised experiences, streamlining claims processes, and implementing wellness programmes are all essential strategies that insurers can leverage to enhance customer engagement, reduce churn, and foster long-term loyalty. Digital health engagement platform dacadoo offers up some ideas as to how life and health insurers can retain their customers.

To successfully retain customers, insurers must tailor policies, communication, and services to fit individual needs and life stages.

This involves implementing digital tools that facilitate effective policy management, claims processing, and health engagement.

Being genuine in these efforts is crucial; insurers should offer programmes and incentives that encourage preventive care and promote healthy lifestyles. Additionally, leveraging predictive analytics and customer insights will help insurers develop effective retention strategies that improve overall service offerings.

In the insurance sector, customer retention is more than just a metric—it is a vital driver of profitability and sustainable growth.

As consumers increasingly seek value for their money, it is imperative for insurers to adapt and innovate their retention strategies.

With insurance customer churn continuing to be a pressing issue, maintaining a competitive edge is essential.

Life vs health insurance retention

It is important to recognise the distinctions between life and health insurance retention strategies.

While both sectors share common goals in customer acquisition and retention, their approaches differ based on the nature of their products and customer relationships.

Life insurers typically maintain long-term relationships with customers, but they face challenges due to limited touchpoints.

Policies often extend over decades, leading to infrequent customer interactions post-purchase. Retention challenges for life insurers include ensuring policies remain relevant throughout various life stages, demonstrating ongoing value without regular claims, and competing with other financial priorities.

In contrast, health insurers engage with customers more frequently but contend with higher churn rates, especially during annual enrolment periods and as customer circumstances change.

Their retention hurdles encompass managing satisfaction amidst frequent claims, balancing premium costs against comprehensive coverage, and differentiating their offerings in a saturated market.

Despite these differences, both life and health insurers can implement strategies that enhance customer engagement and demonstrate ongoing value.

By addressing the unique challenges faced by each sector, insurers can develop tailored retention strategies that resonate with their customers.

9 vital customer retention strategies in insurance

Personalised policy management: Tailoring coverage options based on life stages, family needs, and health conditions is crucial. Life insurers can create policies suitable for various phases, such as parenthood or retirement, while health insurers might offer riders for dental and vision care or travel insurance. The emphasis should be on enabling policyholders to adjust their coverage as their needs evolve.
Simplified claims process: A streamlined claims process is vital for enhancing customer satisfaction. Life insurers should establish dedicated teams to handle sensitive claims, ensuring efficient processing for beneficiaries. Health insurers can also expedite reimbursements, allowing customers to file claims online or via mobile apps with minimal paperwork.
Health and wellness programmes: Implementing preventive health programmes encourages policyholders to adopt healthier lifestyles. Health insurers can offer discounts on gym memberships or smoking cessation programmes, while life insurers can partner with health platforms to promote healthier behaviours. Providing access to telemedicine and health monitoring tools can further enhance customer engagement.
Regular customer communication: Insurers should maintain consistent communication with policyholders, providing tips on managing health, preventing illnesses, and understanding policy benefits. Monthly newsletters, blog posts, and webinars can effectively convey this information, helping customers feel informed and valued.
Loyalty programmes and incentives: Rewarding long-term policyholders with premium reductions, free health assessments, or enhanced coverage can reinforce customer loyalty. Insurers can also implement referral bonuses, incentivising current policyholders to bring in new customers by offering rewards for successful referrals.
Digital engagement and tools: Developing mobile applications that enable customers to manage their policies, file claims, and engage with wellness programmes in one place enhances customer experience. Self-service portals should also be made available, allowing customers to update personal information and track policy details conveniently.
Educational initiatives: Providing educational resources, such as webinars and guides, helps customers understand the importance of life and health insurance. Insurers should focus on topics relevant to their offerings and create content that promotes preventive healthcare.
Community engagement and social responsibility: Engaging in socially responsible initiatives can strengthen emotional connections with customers. Insurers can sponsor health screenings in underserved areas or collaborate with charities to support health-related causes.
Data-driven retention strategies: Insurers should leverage predictive analytics to identify at-risk policyholders and proactively reach out with tailored offers or services. Monitoring health risks and providing incentives for healthy behaviours can also enhance retention efforts.

The digital engagement gap

Traditionally, life and health insurers have limited their interactions with customers to policy purchases and claims, missing out on opportunities for deeper engagement. Research by Bain & Company shows that customers value rewards for healthy living through digital engagement platforms.

To address this gap, innovative insurers are collaborating with technology providers to transform infrequent touchpoints into daily interactions.

A prime example of this approach is Irish Life, a leading life insurance provider in Ireland. Faced with a crowded market, Irish Life launched MyLife, a digital health platform developed in partnership with dacadoo.

This platform fosters daily engagement with customers through personalised health coaching, rewards, and social challenges. By encouraging sustainable health improvements and customised wellness challenges, Irish Life has transitioned from a traditional insurance model to an interactive health partnership.

Since its launch in 2019, MyLife has seen consistent growth in user adoption, demonstrating the potential of digital health engagement in strengthening customer relationships.

To further enhance customer retention strategies, insurers should consider partnering with companies such as dacadoo, as the global digital health market is projected to grow significantly in the coming years.

By recognising and addressing the unique needs of their policyholders, insurers can implement effective retention strategies that resonate with their customers.

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