Other parts of this series:
Accenture recently published the 2017 Global Insurance Distribution and Marketing Consumer Study, which highlighted emerging trends that are disrupting the insurance landscape.
It confirms that consumer behavior continues to shift. Consumers are increasingly dictating how their insurance providers should meet their needs, and their loyalty is fickle.
The study, which polled more than 32,000 customers across 18 markets, shows that the trends identified in Accenture’s 2013 Customer-Driven Innovation Survey have gathered momentum. The shifts in consumer behavior and expectations highlighted in this report have a host of implications for insurers as they rethink their distribution models for both the near and long term.
First, who are these insurance consumers? Three distinct market segments were defined:
Nomads are a digitally active group that isn’t tied to traditional financial service providers. They value digital innovation and are very open to the concept of computer-generated advice.
Hunters are searching for the best deal on price. They prefer human advice and want to use traditional insurers and financial services firms.
Quality Seekers value brand integrity and service excellence that’s focused on their interests first. They’re driven by trust and high-quality, responsive services rather than cost.
Competitive pricing drives loyalty
Competitive pricing is still the main driver for insurance customers, particularly for auto and home insurance. Nomads and Hunters, especially, are looking for ways to save. Insurance products are increasingly becoming commodities. Insurers that work to differentiate their brands and products, add more value to their offerings, enhance engagement and personalize their services have an opportunity to stand out and defend their pricing.
Consumers are willing to consider alternative providers
The study found trends in technology, products and processes that could accelerate the move to non-traditional distribution channels. Consumers are willing to consider buying insurance from someone other than their traditional insurer. For example, 29 percent would consider buying insurance from an online service provider like Amazon. This is particularly true for Nomads, and the trend has increased by six percentage points since the 2013 survey). Quality Seekers, while not as open to alternative providers, are interested in the convenience of buying insurance online. Insurers may want to consider establishing a network of distribution partners or plugging into an existing ecosystem.
A significant number of consumers would be likely to consider peer-to-peer insurance, especially the digital-savvy Nomads. Peer-to-peer insurance is based on the creation of customer pools—self-insured or otherwise—organized around personal or professional affiliations. Carriers can add value to these risk pools by facilitating their formation, and then provide claims and policy servicing together with a backstop in the case of large losses.
How will your insurance enterprise adapt to these changing customer demands? In the next post, we’ll explore recommendations for insurers to be competitive in this changing landscape.