Our insurance industry experts bring you a series of articles on the theme of "Strengthening risk prevention: a winning strategy for insurance companies?
In this 2nd article (the 1st article is available here), we present the challenges and strategies involved in the implementation of prevention policies by insurance companies. Discover the most common obstacles and the questions to ask in order to lay the foundations for a prevention approach supported by insurers.
Contents
1. Ensuring the return on investment of prevention policies
Taking a long-term approach
While not all prevention policies aim for a short-term return on investment, the return on investment, or the impact achieved on a few strategic or mission indicators (reduction in claims impact, retention, acquisition, brand awareness) as well as a sustainable cost level are key factors in their sustainability.
Measuring impact can also be a challenge: most of the time, we're talking about an investment whose benefits, often long-term, can be difficult to quantify precisely or to isolate from other parameters. The benefits may also be attributed to other players: the time lag between prevention actions and their effects may be concomitant with a change of insurer: the economic attribution of the gain is therefore potentially to someone else.
R.O.I. varies according to sector
In the healthcare sector, prevention policies implemented within the framework of group or individual contracts and which have a potential impact on the prevalence of ALD will benefit social security more directly than the insurance company...
If the International Social Security Association (ISSA) estimated back in 2011 that occupational risk prevention is profitable, asserting that companies can expect a potential return of 2.20 euros for every euro invested in prevention, per year and per employee, the economic attribution of the gain remains a subject for the insurer (premium renegotiation vs. claims experience, maintaining the contract in the portfolio vs. funded actions...), and these calculations seem to vary according to the business lines considered.
This is particularly true in the field of commercial property insurance, where the effectiveness of preventive measures is a factor which has a direct impact on underwriting conditions (premiums, deductibles): risk surveys, measurement and anticipation systems, first lines of defense (sensors, etc.)... are all elements which not only effectively reduce the occurrence of risk, but also influence the economic cost of risk for the company (premiums, deductible levels, etc.).These are all elements which will effectively reduce the occurrence of risk, but also influence the economic cost of risk for the company (premiums, deductible levels, etc.).
2. Adapting to specific needs and implementing risk prevention services
The diversity of risks across insurance segments and the diversity of customers require segmented or customized prevention strategies, increasing the complexity of implementation and the potential number of services needed to deliver an effective proposal that meets the objectives set.
The nature of the service must indeed be directly linked to the nature of the risk to be prevented, but also to the targets targeted by the services: the visibility and accessibility of the service, its ease of use, the benefit perceived by the user, the more or less "intrusive" nature, particularly in terms of personal data, are all parameters to be taken into account when defining the service.
Whether or not to include partners, whether for their technical expertise in the service or for their proximity to the customer targets envisaged, is also a parameter that will require a capacity for integration/connection to be taken into account in the implementation of the service, right from the design stage.
These are all elements that can change the lines in terms of costs, and therefore impact the expected benefits: the key words are visibility, accessibility and simplicity.
3. Encourage the use and commitment of policyholders
The need to communicate to raise awareness of risk prevention services
To encourage the use of services and the commitment of the target group, policyholders must first be informed of the existence of the service.
This requires effective communication (message, format, channel, etc. adapted to the target) clearly highlighting the advantages and benefits that policyholders can derive from using the service made available to them, both for themselves (living in better health, avoiding car accidents, limiting risks linked to climatic events), and in their insurer/insured relationship (advantages, discounts, etc.).
Simple services designed for users
The challenge, once the policyholder is interested in the service, is to move on from a discovery use to a useful use, reinforced by ease of use, enabling the service to become part of the policyholder's daily life and lifestyle.
The service's usefulness will be all the more pronounced if the operating mode and rules are designed to be consistent with the policyholder's objectives and lifestyle (e.g. programs to encourage walking: average the number of steps/day over a given period rather than rigidifying the number of steps/day, overvaluing successive series, etc.) and if the use of the service is simple.) and if the use of the service is simple: for example, anticipate access to services requiring regular input of access data (management of complex passwords and IDs vs. Face ID in the app, for example).
For a service to achieve its useful purpose, it is necessary to ensure that all the dimensions making up its promise are delivered in the most engaging way.
Get the distribution network on board right from the service design stage
Given the multitude of ways in which insurance products and preventive services are distributed, it is vital toinvolve the distribution networks from the outset, to benefit from the network's expertise and understanding of customer needs, to ensure that the proposed services are clearly understood and perceived as useful, and to have operational relays to promote the use of these services. Integrating the distribution network in advance also ensures that, depending on the nature of the service, any workload or management required of the network remains measured and aligned with its own objectives.
From the use of a service (well thought-out 
) obviously depends on its effectiveness and its achievement of the initial objectives assigned: it is therefore key to implement tools to measure and manage the deployment and use of these services from the outset in order to identify areas for improvement (from promotion to execution) and, if necessary, decide whether or not to discontinue services deemed non-performing by the company or policyholders.
4. Integrate technological and operational prerequisites
Some prevention services (in P&C, but also in Healthcare) may require the adoption of new technologies (connected objects, artificial intelligence, augmented or virtual reality, drones, etc.) as well as more traditional technologies and the implementation of interfaces, databases, etc.
Their implementation therefore requires a certain level of technological maturity, in terms of availability and control, backed up by an operating model that enables the service to be supported throughout its life cycle (design, deployment, scale-up, maintenance, etc.). If we add to this the nature of the service and the cost carrier (co-financed, shared, platform-based services), the initial investment as well as maintenance and evolution costs can be significant.
Mastery of the technologies underlying the services and their evolution, as well as mastery of the partners involved, are key elements to be taken into account from the outset for a successful approach to implementing prevention services.
Implementation also requires a cross-functional vision (legal and regulatory, business, technological, customer), enabling investments to be pooled or supported by technologies already present within the company, keeping in mind alignment with the company's overall strategy and objectives.
Conclusion
CSR labels: how can iQo help you?
Obtaining a CSR label can be a daunting task for companies who set out without a methodology. A specific CSR label attests to a company's or an organization's
Which CSR labels should banks and insurance companies choose?
A specific CSR label certifies that a company or product complies with a specific standard. But how can mutuals, banks and insurance companies do this?
How to optimize the efficiency of a retail bank's support functions?
The efficiency of support functions is a key challenge for retail banks, reinforced by the current economic climate. Indeed, sustained inflation and rising interest rates are forcing
