For the last several weeks we’ve been looking at how the digitalized world has changed consumer habits and the impact that is having on the insurance industry.
Today I will conclude that discussion with a look at the so-called “switching economy,” and some insurance industry-specific statistics on what it means.
Accenture defines the “switching economy” as the annual revenue at play that is driven by consumers switching from one life or P&C provider to another. We calculated that in 2013, the global switching economy was worth as much as $400 billion.
This is more than most people think, and it has swelled over the past five years, driven by the new, non-stop customer and spending growth.
This changing dynamic is affecting P&C insurance consumers globally:
- Prospecting has gone online, with corporate websites (52 percent) and online expert/comparison sites (47 percent) most used. However, 32 percent of consumers still look for information in agencies/branches.
- 21 percent of customers perceive a lack of differentiation in offerings, 7 percent more than last year.
- 40 percent of customers turn directly to one brand without considering others, which leaves 60 percent considering several providers.
- Only 19 percent of customers perceive customers’ switching from brand to brand to be a hassle, and 30 percent are open to shop for better deals.
- 39 percent have switched partially or completely in the last six to 12 months, with large variations by country. Price remains the top reason, at 52 percent.
- Though 30 percent of P&C customers are very satisfied with their providers, only 22 percent feel loyal to them, and an equal ratio actually does not feel loyal at all.
- Insurer contact centers are the second-most-used service channel (55 percent), after the company website (76 percent).
- 52 percent of customers want to see more online interaction along the insurance product lifecycle.
- 28 percent of consumers have purchased one P&C insurance product in the past six months, with emerging markets (40 percent) showing higher purchasing behavior than mature markets (26 percent).
As technology commands a greater hold on people through mobile devices, wearables and the Internet of Things, it’s not likely that this trend will be doing anything but becoming more prevalent.
For insurers, it means both larger risks and more opportunities—which ties back to the beginning of this blog series, where we emphasized the importance of being prepared for the consumer of the future.
Is your company ready? What are you doing to prepare for Customer 2020? We’d love to hear from you, so please contact me and share your thoughts and ideas!
For more information download the report: Capturing the insurance customer of tomorrow: Three key questions to guide success
Here are some other reports that may be of interest: