Matt Hutchins, Managing Director, Head of UKI Insurance, takes a look at the findings from Accenture’s Financial Services Customer Survey 2016 and draws out some key messages for life and non-life insurers. The priority? Find ways to understand customers and rebuild trust.
The UK insurance industry has a big challenge ahead of it. Accenture’s 2016 UK Financial Services Customer Survey shows that only 20 percent of respondents consider insurance companies to be trustworthy. And it was an even worse story for IFAs and insurance brokers.
It’s not all bad news. Our survey found that both life and non-life insurers managed to raise their levels of customer satisfaction over the past year. And the proportion of customers who recommended their insurer to friends or family in the past year has also risen slightly.
But clearly something is still going wrong. Trust is a precious commodity, important to possess, damaging to lose and hard to rebuild. Bottom line? It can only be established by exposing customers (consistently) to positive experiences.
So what do insurers need to do? In blunt terms, understand what your customers want and get better at providing it. Right across the financial services sector, customers are demanding access to differentiated, relevant products via easy-to-use channels. Insurance customers are no different.
We know they require a blend of physical and digital channels, especially where they’re taking long-term financial decisions. Life and pensions customers like to carry out research online, but they still value face-to-face interactions at the moment of purchase.
They also seem to attach real value to product consolidation and simplification, particularly where life insurance and savings are concerned: 37 percent would consider using a life insurer that covered all of their life insurance and retirement needs under one simple policy.
Insurers need to take these findings on board and apply them to their own product and service strategies. They also need to bear in mind that certain segments of their customer base have a stronger appetite than others for digital interactions.
We found that customers who hold a sophisticated blend of multiple financial products behave differently from the crowd. They’re more engaged and significantly more digital. They’re also harder to please and less loyal. It’s an interesting customer segment for insurers. Financially sophisticated customers are more desirable (because they’re more likely to hold multiple products with the same provider). They’re also cheaper and easier to serve (because they’re more digitally engaged).
The priority from now on? Understand how to create and deliver new, increasingly personalised products for core customer segments. This raises a new set of challenges. To develop more relevant products, insurers need access to more granular customer information. And how they obtain and use that data is hugely sensitive. We found that customers will be more willing to share more data with insurers where there are clearly articulated benefits on offer.
For example, lower premiums emerged as the strongest incentive for sharing more data with home or motor insurers, with 48 percent of respondents saying they’d actively consider doing so. Obtaining better value or better insurance coverage were also of interest.
It’s all about balance. Insurers need to get smarter about how they use data to create differentiated products for their customers. But they have to understand where access ends and privacy begins. In follow-up blogs, I’ll be looking at the results of our survey in more detail and pulling out some more key findings for UK insurers.
To learn more, download our report here Accenture’s UK Financial Services Customer Survey 2016