Picture this: You are ready to head out of your house, but no matter how hard you look, you can’t find your glasses (or sunglasses) anywhere. Exasperated, you throw your hands up – only to find your glasses resting on top of your head. Sound familiar?
It happens in all parts of life: The solution we seek is often much closer than we think it is. The same holds true for insurers seeking to increase policy sales. While it is logical to look to the uninsured and seek to expand into untapped populations for new business growth, existing customers often provide the best opportunities.
It makes sense really. If people have made the decision to purchase insurance once, wouldn’t they be more likely to do it again? If insurers truly believe in their products and the value those products provide – from peace of mind to long-term financial security – wouldn’t customers who have already experienced these benefits represent a prime market for additional sales? Taking it a step further, how about people who have already made claims on policies and received payment? Does the risk they pose for future claims outweigh the clear sales opportunity they represent?
Cross-selling and upselling to existing customers is of course nothing new – in insurance or any other industry. Historically, however, insurance customers who have made previous hospital claims have been viewed as mostly uninsurable by life and health insurers. They are often classified as impaired regardless of the cause of their claim and denied access to a carrier’s most popular offerings.
In Korea, RGA is challenging this thinking. In a market in which upselling to existing customers is essential to increasing business volume and simplified issue (SI) is the most popular vehicle to sell insurance, eliminating previous claimants from SI consideration means eliminating a potentially substantial growth opportunity. RGA has developed a solution to fill the gap.
Case Study: Claims as a Business
Claimants present an interesting challenge for insurers. On one hand, they have made a claim and therefore may carry greater risk of making claims in the future. On the other hand, the insurer has gained deeper insight into their health history through the claims process. Consider this: Impaired lives among new applicants can more easily slip through SI screening questions than can those with a claims history. Furthermore, claimants in good health – for example, an otherwise healthy individual who has made a claim for a one-time procedure such as having his or her appendix removed – can pose significantly less risk than a new applicant.Read More +