Actionable Insights From APT's Retail Practice

Game On: Insurers Increasing Gamification

February 3rd, 2017 | Posted by APT in Insurance

In the insurance industry, gamification is gaining traction as a tool to engage policyholders and agents alike, channeling the fun of playing games – points, prizes, and all – into interactive educational platforms.

Incorporating game-design elements to appeal to individuals’ sense of competition and achievement has many useful applications across the insurance industry, from incentivizing agents to sell new products to enticing current and future policyholders to take a more active interest in their insurance investments.

One example of gamification for insurance policyholders is from Aviva, which offers a mobile app designed to evaluate users’ driving skills. During a trip, the app regularly rates the user’s driving, providing a breakdown of feedback on the ride overall and badges that can be earned and shared via social media accounts. The app also offers an insurance quote based on the driver’s performance, which can lead to significant savings and may convert app users to new policyholders, ultimately driving profits.

Additionally, insurance companies are leveraging gamification to encourage positive agent behavior. The nuances of different insurance policies and products can be quite complex, and gameplay is one way to help agents become more knowledgeable. Boosting their familiarity with their product portfolio will hone their sales capabilities and increase profits.

Another approach is using gamification to incentivize sales, driving friendly competition among agents and motivating them with financial rewards. One insurer that adopted this approach is American Modern, which established a competition for agents across states to earn points and win prizes, with the goal of educating them on its specialty residential insurance solutions.

While implementing a gamification system might build brand engagement and ultimately lead to incremental premiums, implementing strategies that might shift agent and policyholder behavior is not without its risks. For one, gamification will inevitably be more effective with some agent and policyholder groups than others. For instance, some agents may feel that game playing trivializes their work, and others may simply be reluctant to engage. On the policyholder side, older, less digitally-savvy individuals may not be interested in playing online games or using mobile apps.

There are additional risks involved with implementing gamification programs. These initiatives often require investment in the form of tech infrastructure and prizes for winners, which can quickly add up, especially when big-ticket items like vacations are up for grabs. Incentivizing sales of a particular product can also shift attention away from other lines, which can result in losing out on revenue from those products. Further, using gamification to motivate sales may lead agents to bring in riskier or less profitable policies to quickly boost numbers for the sake of winning a prize. So, in light of this, how can insurers be certain they are making the right decisions to achieve positive impact with their gamification initiatives?

The best way to refine gamification programs is by first testing them with a subset of agents or policyholders, and comparing their performance with a similar group that did not participate in the program. By taking this Test & Learn approach, insurance executives can accurately measure the incremental impact to better understand whether a program is successful, and with whom. Armed with these insights, insurers can make data-driven decisions on how to implement these programs most effectively and maximize ROI.

To learn more about how insurers can leverage analytics to innovate more effectively, watch this video.

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