Behavioural economics boosts annual premiums by 60%
The Applied Behavioural Economics team was commissioned to improve the conversion rates and the premiums collected for an asset manager’s retirement-product campaigns. The campaigns sought to migrate customers from old-generation products to new ones, while also increasing monthly premium contributions.
The insights that surfaced during the “understanding” phase of the work revealed that the proposition communications were information heavy, unclear on the customer benefit, and did not provide a salient course of action for interested customers.
The team redesigned the process by embedding behavioural economics throughout the customer journey. A priming SMS was introduced, communications were simplified, and the campaign strategy was optimised with behavioural insights.
A rigorous test was implemented and resulted in a 27% increase in conversion rates, as well as a 60% increase in the annual premiums collected. This benefited the firm and also its customers, who as a result are better prepared for retirement. The 2.5 times ROI in this work paved the way for continued applications of behavioural economics in the client’s product campaigns.