Insurance Chart of the Week: Customers on the move

Accenture conducted a consumer survey about multichannel distribution in insurance, and the results indicate challenges and opportunities for the industry.

The challenges? Customer retention will be a major test for insurers in the years ahead.

The opportunities? For insurers that are able to offer a relevant and appealing value proposition, the potential to attract disillusioned customers has never been greater.

Customers on the move

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In this week’s chart, I’ll focus on the Accenture Multichannel Distribution Insurance Consumer Survey. We surveyed 3,555 consumers across six countries—France, Germany, Italy, Spain, United Kingdom and Brazil—about consumer attitudes and behaviors in purchasing insurance.

Accenture Blog on Insurance Chart of the Week: Customers on the move. This opens a new window.

Figure 1 shows the proportion of consumers who plan to renew or purchase insurance from their current providers. The results show that while one out of two consumers intend to buy insurance from their existing provider, only six percent have made up their minds to switch.

However, that leaves a massive 47 percent of consumers who are shopping around.

Other points of interest:

  • Loyalty is highest in Italy and France, where almost two out of three customers will buy from their current provider.
  • Loyalty is lowest in the United Kingdom and Germany. In fact, in Germany, 15 percent of consumers have already decided to switch insurance providers.

Other findings from the survey:

  • Only 34 percent of consumers are satisfied with their life insurance company.
  • No more than 20 percent of respondents say they will definitely buy from their current insurance provider.
  • Only 25 percent of consumers would recommend their current insurer to others.
  • During the six to 12 months prior to the survey, 25 percent of customers changed their mix of providers.

Customer retention is, and will continue to be, a key challenge for insurers. However, savvy insurers will capitalize on these opportunities to attract disillusioned customers.

Download the Accenture Multi-Channel Distribution Insurance Consumer Survey.

Join me next week as I talk about the channels that consumers are using to purchase insurance.

Insurance Chart of the Week: Social media is not all fun and games

It seems you can’t go anywhere without hearing about social media. Facebook and Twitter are no longer experiments, but are essential touch points of marketing campaigns, customer experience and communication.

While other industries have been faster to adopt social media, that doesn’t mean that it’s too late for insurers. In fact, adoption of social media is more important than ever for an industry that is driven by consumer trust.

Social media is not all fun and games

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As I mentioned in a previous chart of the week, the insurance industry is currently dealing with low—and declining—customer trust and loyalty. And yet, the industry is based upon trust between consumers and their advisors or agents.

Social media can help build this trust. Through social networking platforms, consumers share information that is vital to building strong insurer-consumer relationships. Not only does social networking offer an opportunity for insurers to keep up with consumer needs, it also provides a way for insurers to maintain presence during the periods when customers aren’t thinking about insurance.

Also consider the advantages that social media offer to new insurers. It’s easier today to achieve scale, sales and service than it was before. Further, insurers can take advantage of viral marketing and real-time data.

Challenges for insurers using social media

Accenture Blog on Insurance Chart of the Week: Social media is not all fun and games. This opens a new window.

Like I say, it’s not all fun and games. Though social media offers advantages, insurers must take into consideration the industry regulations for using these channels. For example, insurers must publish explicit social media policies and monitor conversations. More regulations are shown in Figure 1.

In addition to considering these regulations, it’s also a good idea to provide social media training before using these channels for business use.

Find out more about how to leverage social media in insurance.

Join me next week as I talk about the Accenture Multichannel Distribution Survey, which shows that consumers are on the move.

Insurance Chart of the Week: What happened to trust?

The iconic image of an insurance salesman at the kitchen table isn’t just warm and fuzzy—it hints at the idea that insurance consumers trust their providers. However, since the economic downturn, insurance companies have lost consumer trust and loyalty. What happened?

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What happened to trust?

Accenture looked at the qualities that insurers need to achieve a sustainable competitive advantage and profitable growth. We found that innovation, responsiveness and agility are extremely important. But then there’s the issue of customer trust.

Figure 1 shows that insurers have to deal with customers whose trust and loyalty are low—and declining.

Accenture Blog on Insurance Chart of the Week: Do you know your customers? This opens a new window.

In fact, in the Accenture Global Consumer Behavior study, only 40 percent of survey participants reported that they trust the insurance industry to do what is right—placing insurance the lowest-ranked of 13 business sectors. Further, loyalty toward insurers is a mere 25 percent.

In a follow-up question, consumers indicated that they’re much more willing to consider switching providers:

  • 25 percent had switched insurers in the 12 months prior to the study.
  • 20 percent expect to switch insurers in the next six to 12 months.

Profitable growth in the new reality

These are sobering numbers, but they’re also an important wake-up call. To learn more about how to rebuild customer trust, download Profitable Growth in the New Reality.

Insurance Chart of the Week: What drives purchases of auto and home insurance?

In today’s competitive market, many consumers view life insurance as a luxury. However, auto and home insurance is typically seen as essential.

What are consumers looking for in auto and home insurance? Price and quality rule the day.

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What drives purchases of auto and home insurance?

Accenture Blog on Insurance Chart of the Week: Do you know your customers? This opens a new window.

However, Accenture research shows that insurers have a few challenges to overcome. Consumers see life insurance products as either too complex, or as a luxury product. And while property and casualty insurance doesn’t have to overcome those perceptions, they are seen as commodities.

There are some fascinating numbers in Figure 3. Consider that 74 percent of respondents say that price has become the most important factor in selecting an insurance provider. That’s more than the 69 percent quote cite quality of coverage, and 60 percent who cite ease of contact as the most important factor.

More important, carriers should take note that consumers ranked an existing relationship as the least important factor when making a purchase. It’s a compelling reason to develop a strong customer segmentation strategy and to take a close look at channel distribution.

For more information, download Attracting and Retaining Customers for Life.

Next week, I’ll tackle the topic of consumer trust in the insurance industry.

Insurance Chart of the Week: Where Are People Buying Insurance?

In this week’s Chart of the Week, I’ll talk about where people are buying insurance—and specifically, life insurance. In summary: the agent lives on, but direct channels and the Internet are closing the gap.

Where are people buying life insurance?

Accenture conducted an Insurance Consumer Survey and looked at the behaviors of life insurance buyers. We found that they continue to exhibit traditional buyer values, and that a significant portion of them will buy additional policies as their needs change.

Here’s the opportunity for insurers: buyers want to buy policies from companies they trust—not just the ones they currently do business with.

What channels do life insurance customers prefer?

Figure 2 shows the channels that life insurance customers prefer to use.

Accenture Blog on Insurance Chart of the Week: Do you know your customers? This opens a new window.

Consider that 21 percent of life insurance customers prefer to buy online. As Generation Y—or millennials—get older, their preference for newer, more immediate means of communication is not just a fad, so we expect an increase in the percentage of life insurance who choose to buy life insurance online.

Build it (trust) and they will come

Despite the increase in the online channel and numerous changes in channel delivery, Accenture research shows that 75 percent of consumers still prefer to buy from agents and trusted sources.

It goes back to the idea that insurance customers want to buy from companies that they trust. The moral of the story, then, is to build trust to attract and retain customers.

For more information, download Attracting and Retaining Customers for Life.

Join me next week when I look at what drives purchases of auto and home insurance.