In Part One of this series: A changing industry requires changing strategies, I introduced you to Accenture’s recent survey of 4,000 US personal-lines customers. This week, I’ll take a closer look at some of the findings.
In personal-lines insurance, the Internet is important—but it’s not everything. Our survey confirms that preferences are changing, and if you want to respond to customers’ evolving needs you first need to understand them.
Knowing your audience
When it comes to customer preferences, the survey revealed:
- Consumers are becoming more diversified. They prefer to use different channels for different stages of the buying cycle. As illustrated below, there is a lot of diversity in the channels that customers prefer, and the same customer relies on multiple channels to get information and quotes.
Accenture’s research leveraged the conjoint analysis methodology to measure the actual importance of the above factors in the selection of a P&C insurance product. Rather than directly asking survey respondents what they prefer in a P&C insurance product, or what factors they find most important, respondents were put in a realistic situation and asked to make a series of trade offs. Analysis of these trade-offs revealed the relative importance of component attributes, which provides a more realistic view on how respondents made choice between products. The findings revealed:
- Price isn’t everything. Price can be credited with much of the success of the UK aggregator channel, but in the US, price isn’t the only important factor.
- Advice has value. When asked if they would be willing to pay to get personalized advice or assistance when purchasing auto or home insurance, more than one third of customers answered yes. Younger consumers are more willing to pay for personalized advice.
- Age is not the great divider. Age is not a decisive and consistent predictor of channel preferences. Thirty-two percent of customers aged 18 to 24 said they prefer to obtain a quote in person. This number was surpassed only by the oldest respondents—39 percent of which preferred to obtain a quote in person.
As you can see, preferences are as diverse as the customers themselves. So, as an insurer, how can you be all things to all people? The answer, in short: You can’t. Next week, I’ll explore two business models for achieving high performance in insurance.
To learn more, read Accenture US Personal-Lines Insurance Consumer Survey: What high performance insurers are doing to achieve growth in a dormant market (pdf; opens in a new window).