New entrants—more customer-centric and digitally sophisticated than most established carriers—are transforming the way insurance is bought and sold. Their scalable, digital platforms, augmented by analytics, threaten the traditional distribution model.
They deliver value propositions at low cost via digital channels and convenient, point-of-purchase touch points, which appeal greatly to insurance consumers hungry for a simplified, transparent and personalized buying experience.
Accenture surveyed more than 6,000 insurance customers across 11 countries to identify the sort of experience they want and their switching preferences.
The research shows that a majority of insurance customers (76 percent) would switch providers for more personalized service and tailored product offerings.
Even more interestingly, only 38 percent of the customers surveyed said they would be willing to pay more for these personalized services. That clearly suggests today’s insurance customers expect and demand these tailored offerings be a part of core services.
In order to attract and keep the loyalty of these consumers, leaders in insurance need to develop a digital strategy that is aligned with their business vision and IT platforms, as well as with the expectations of their customers. It needs to fulfill four fundamental objectives of a superior customer experience:
- Execution of fully-formed and real-time interactions
- Extension of awareness and extension of reach
- Delivery of highly personalized experiences
- Creation and distribution of rich, interactive content
Insurance leaders also need to tailor value propositions to their chosen target market segments, identify new product or service offerings, and then evaluate which non-traditional partnerships and business models will complement them. Take a look at the global partnership between Allianz and BMW, for example. Since 2009, they have tripled their personal auto insurance business. Recently, the inclusion of a telematics tracking package for BMW’s electric cars put the carrier at the forefront of digital innovation in the auto market. After purchase of a BMW vehicle, Allianz provides a customer with seven days of complimentary car insurance. The mileage is tracked via BMW ConnectedDrive, and at the end of the week the customer receives the option to continue the insurance agreement with Allianz on its FlexiMile or Unlimited Miles programs.
Carriers that have partnered with new industry entrants are already reaping the rewards, leveraging their natural advantage as underwriters to strengthen their customer relationships.