In part one of this series, I introduced the podcast about Accenture’s US Insurance Consumer Survey. In part two, I discussed the results of the survey.
The survey showed that for both property and casual insurance and life insurance, three-quarters of respondents preferred to purchase products through an agent. However, the remaining respondents were more inclined to purchase products through the Internet. How can insurers use this information to increase their market share?
Market segmentation is key
These survey results tell us that market segmentation is a key strategy for insurance companies. For high performance, insurers must understand each market segment and its needs. By defining these customer segments, insurers can match customers with appropriate products. More important, they can deliver the service and type of interaction that the customer wants, improving customer retention and building long-term customer loyalty.
Grow with your customer
Once you have defined customer segments, the next step is to predict their needs as they mature. How will you continue to engage and deliver appropriate products in the future? By tracking the progression of these customers with time, the insurer can offer more products at optimal times.
Consider an insurer who develops a successful strategy that wins customers in the 18–24 age range. As the customer matures—for example, gets married, has children or purchases a home—opportunities for new products emerge.
As a customer segment matures, it is also important to re-evaluate the distribution channels that you are using. While direct channels may be effective for simpler products targeted at a younger audience, this may change as the customer segment matures and has more complicated insurance needs.
Opportunities for growth
Insurance typically scores very low in surveys of consumer confidence and loyalty. In fact, one in six respondents to our survey who owned a property and casual insurance were considering switching to a new provider within the next 12 months. Their primary motivation was to reduce costs. While this presents a retention challenge for insurers, it also provides opportunities for successful insurers to acquire new customers.
In the life insurance sector, many consumers do not understand their policies or what the effect of the economy is on their policies. This provides an opportunity for insurers to reach out, answer questions and demonstrate the value in the relationship for the present and the future.
In both property and casual and life sectors, it is increasingly important for insurers to ask how they can help their customers. Providing flexible products can help engage customers who might otherwise look elsewhere. This can include reduced coverage, flexible payment terms or tailored informational products. Again, this is an opportunity for insurers to demonstrate their value to the customer and build trust.
Accenture’s US Consumer Insurance Survey told us a lot about the current landscape for insurance companies. By developing market segmentation strategies and long-term plans for customer engagement, insurers can deliver targeted products to customers through the channels that work best.