Accenture’s 2014 Global Consumer Pulse Survey, which interviewed more than 23,000 people, including 6,507 life insurance respondents, highlights the importance for carriers of finding new ways to retain their existing customers. The survey found that just 28 percent of life insurance customers are highly satisfied with their current provider, 24 percent would consider shopping around for a better deal and 34 percent have switched to a new provider in the past 6-12 months.
Commoditization of insurance products is eroding not only insurers’ margins but also their differentiation. Twenty-four percent of the life insurance respondents in the survey believe most carriers are the same in terms of their products and services. This perception helps explain why price was cited as the main reason for customers switching providers (46 percent of respondents included it in their top three), followed by value for money (38 percent).
However, insurers who choose to adapt to the needs of a changing customer and competitive landscape by harnessing new transformative technologies, face significant challenges. Most carriers know they need to improve their understanding and segmentation of customers, enhance their ability to tailor their propositions and experiences to the various segments, and strengthen their multi-channel capabilities. Yet even this may not be enough.
To give customers what they truly value, many will have to partner with other companies—probably outside of the insurance industry—to form ecosystems that offer a broad and innovative range of products and services.