A Practical Guide to Perks & Engagement Programs in the Insurance Industry

Last updated
Jun 13, 2024
Explore our guide to Perks & Engagement Programs tailored for the insurance industry. Learn how these programs enhance policyholder loyalty, drive engagement, and comply with industry regulations. Discover practical strategies for implementing effective perks that increase retention and differentiate your offerings in a competitive market.

As the landscape of the insurance industry evolves, insurers are increasingly turning to perks programs to differentiate themselves in a competitive market. These programs not only enrich the customer experience but also improve loyalty and retention, becoming a pivotal aspect of modern insurance offerings.

Understanding Perks Programs in the Insurance Vertical

Perks programs are tailored initiatives designed to provide added value to prospects and policyholders throughout various touch points with the brand. These programs have gained traction in the insurance industry due to their effectiveness in enhancing customer satisfaction, engagement, and driving desired actions and behaviors. As traditional product offerings become commoditized, insurers are leveraging perks programs to stand out and deliver exceptional value to their clients. It's important to note that these types of programs must be built thoughtfully, with accurate compliance to insurance industry regulations, such as anti-rebating laws and anti-inducement regulations.

Successful Implementations in the Industry

One of the standout examples of a successful perks program is the Travantage Program launched by Travelers Insurance in 2023, offering a range of exclusive benefits and discounts for complementary products and services relevant to customers across their main lines of coverage. Travelers even launched a content hub providing helpful articles and guides for prospects and policyholders along with corresponding perks that would help them save money. Other Paylode partners, such as Toggle (Farmers Group), Jetty, Zurich, The General and others, have leveraged the Paylode platform to launch similar programs. Other carriers have launched programs in-house illustrating the widespread adoption and success of perks across the sector. Almost all major insurance carriers, specialty providers, and even brokerages are in a race to launch industry-compliant and high-performing perks programs.

Objectives Behind Launching Perks Programs

Insurance companies implement perks programs to achieve specific key objectives:

  • Drive Engagement: Engaging customers through regular interactions and rewards. Typically, policyholders get a letter in the mail every six-twelve months informing them that their premium costs are going up, which leads to high churn-rates. Whereas a well-crafted perks program allows an insurance company to provide consistent value throughout the year, making it easier to justify a premium increase upon renewal.
  • Retention of Policyholders: Reducing churn by increasing the perceived value of policies. A person is more likely to stick with companies that look out for their best interests, for example by helping them save money on complementary products and services throughout the year.
  • Encourage and Reward Users: Perks are a perfect way to reward users for taking desired actions that drive specific business metrics for the insurance company. For example, if you want your customers to install your mobile app, log into their portal, upload required info, opt into paperless billing, etc.—you can reward these actions with a perk.

Data supports the effectiveness of these programs, with some insurers reporting up to a 40% increase across core business metrics after implementing comprehensive perks programs.

Simplifying Perks Program Management with Paylode

Paylode simplifies the launch and management of perks programs through an intuitive platform and a full suite of tools and management resources designed for insurance companies. Key features include:

  • Pre-vetted Perks Marketplace: Access to over 1,000 industry-compliant and pre-negotiated perks
  • No-Code software interface: Enables quick launch and management of perks programs, perks marketing campaigns, and even ability set up perk campaigns to boost specific actions.
  • Dashboards: Insights and reporting tools to track engagement and optimize program effectiveness over time.

This user-friendly platform allows insurers to effortlessly customize and scale their offerings to meet diverse customer needs, without spending months of setup time and countless extra FTEs.

Navigating Compliance in Perks Programs

Working in the insurance industry means being on top of all regulatory aspects to ensure compliance with federal and state requirements for protecting the best interests of consumers. Paylode ensures that all perks programs are compliant with current industry regulations. Our collaborations with top law firms and industry advisory groups, as well as a thorough understanding and adherence to the core regulatory guidance documents from the NAIC, ensure our solutions meet the highest standards of compliance and consumer protection.

Note:  Each year Paylode publishes an up-to-date compliance white-paper, outlining the evolution of the regulatory guidance around value-add services and its impact on perks programs. For the latest compliance guide and copy of the white-paper, please schedule a five minute call with one of our advisors.

The Increasing Necessity of Perks Programs in 2024

With insurance premiums rising dramatically—by as much as 46-62% (per Wall Street Journal) since 2020 in some states—perks programs are no longer just an added benefit; they are a necessity. These programs provide substantial savings to policyholders through access to curated collections of pre-negotiated discounts for complementary products and services that consumers buy and use every day, helping to offset cost increases and enhance financial wellbeing of your customers.

Furthermore, perks programs:

  • Drive Long-Term Loyalty and Customer LTV: Promoting a long-term fruitful relationship between the customers and your company.
  • Motivate Desired Actions: Rewarding prospects and policyholders for taking specific actions, which can drive and increase your most desired business KPIs.
  • Differentiate and Innovate: Offering customized perks aligns with corporate social responsibility goals and sets insurers apart from competitors through innovative approaches and initiatives.

What's Next...

We invite you to learn more about the transformative impact of Perks & Engagement Programs in the insurance industry. Please visit our website or connect with one of our advisors. As always we are happy to show you a demo of our platform or provide a no-cost workshop for your leadership team about best practices around this rapidly-evolving area of the insurance business.

If you're ready to launch or migrate your industry-compliant insurance perks program, please contact us.

About the author
Mikhail Naumov
Mikhail is a tech entrepreneur and Founder & CEO of Paylode Inc. He is the best-selling author of “AI is My Friend: A Practical Guide for Contact Centers”, and has been recognized by Forbes Magazine on the "Forbes 30 Under 30" List for Enterprise Technology.
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