Other parts of this series:
- Shifts in consumer behavior offer big opportunities for insurers
- The new “everyday insurer” will win customers by delivering innovative products and exceptional experiences
- These new distribution models will help insurers deliver the personalized services consumers crave
- Successful digital distribution depends on a key market: Nomads
- Personalization is the key to luring lucrative insurance Nomads
- Don’t forget traditional insurance buyers in the rush to please digitally-active Nomads
Satisfying traditional insurance customers, as well as digitally-active consumers, is likely to be vital for the success of major carriers.
Insurers eager to connect with the rising number of digitally-active consumers, who are hungry for personalized online services, should beware of neglecting more traditional customers.
Digitally-savvy shoppers, whom we’ve termed Nomads, are certainly a critical market for insurers. They offer carriers big opportunities to grow their revenues and expand their businesses. However, more conventional insurance customers, who primarily prize value for money or high-quality service, will remain crucial to the success of major insurers. Carriers need to ensure that their distribution channels continue to meet the needs of these traditional purchasers. They’ll remain a large and influential slice of the insurance market.
Around 60 percent of the people we canvassed for our Global Distribution & Marketing Consumer Survey were traditional insurance customers. We divided them into two distinct types: “Hunters” and “Quality Seekers”.
Hunters seek out the best prices for the products they need. The belief that they’re getting value for money sustains their loyalty to their insurance providers. Most Hunters want to deal with conventional advisors, not automated services, when they’re looking for insurance. Only 20 percent of those we surveyed were very willing to accept advice from an automated service when buying insurance. None of them would consider using a digital service provider, such as Google, to buy cover and only 13 percent would buy from a supermarket or another retailer.
To keep Hunters happy, insurers should strive to pare costs so they can reduce prices while maintaining good levels of service. They need to build a reputation for competitive pricing before they start experimenting with new offerings. Furthermore, greater investment in process automation would free their agents to provide Hunters with more personalized attention and allow them to sell additional services and products.
Quality Seekers are drawn to insurers with strong brand integrity and a reputation for high-quality service. More than 60 percent of the Quality Seekers we canvassed turn to agents for insurance advice and to buy cover. They put a high value on personal service and trust. Around 40 percent of those we surveyed acknowledged that it was important that their insurer protected their personal data. They were willing to share personal information with their insurance company provided they gained something in return. Sixty-seven percent wanted priority service.
Insurers targeting Quality Seekers should automate routine transactions and concentrate on providing highly-personalized customer service. They need to communicate their commitment to data security and protecting the interests of their policyholders. It’s especially important for these insurers to be transparent to their customers about how information about them will be used, by whom, and what will be given in return.
For further information about our recent research of consumer trends in the insurance industry take look at the previous posts in this series or the report below. I’m sure you’ll find them worthwhile.