Personal lines property and casualty insurers have every reasonto be nervous. Recent research conducted by Accenture indicatesthat 40% of P&C customers worldwide are at least somewhatlikely to switch to a new provider for their auto and homeinsurance in the next 12 months. These insurers are not deliveringwhat customers want: more relevant, convenient and cost-effectiveproducts and experiences.

Insurers are battling to prevent their existing customers fromhearing the call of lower premiums and a wide array of new andcompeting offers. Carriers that take a more aggressiveapproach–using digital innovation to offer customers better pricesor better experiences–can keep their own customers and lure othercustomers away from competitors. 

Price and value for money are still the key reason for switchesamong insurance customers, cited as important or very important inswitching decisions by 87% and 80%, respectively, of thosesurveyed. Increasingly, price and value for money are likely tobecome integrated into how the total customer experience is rated.Innovation will become increasingly important, not only to helpinsurers keep pace with customer expectations but also to meet thechallenge of providing better value for money. 

Only those insurers with digital capabilities and a flexibleoperating model will be able to adapt effectively to the changingdemands of customers. This will help them retain (and furtherpenetrate) their existing customer base, but also attract the largenumber of dissatisfied customers who plan to leave their lessfarsighted providers. 

To win these dissatisfied customers, P&C insurers need togive careful thought to how they move from selling products toproviding useful experiences. Survey respondents stressed theimportance of personalization, with 41% expressing a willingness topay more for personalized advice and better coverage. And, eventhough most customers consider their risk profiles to be average orlow, 44% of respondents saw it as critical that their insuranceproviders help them manage that risk. 

Three key elements attract these dissatisfiedcustomers: 

1) Property and casualtyinsurers must respond to the new customerdynamic. While good businesses have always triedto put the customer first, the outreach in the past has been fromthe company to the customer. Digital technologies have changed thatdynamic completely. Customers now have the ability to compare aprovider's products and overall customer experience with those ofits competitors, both within the industry and across industries.Control has passed to the customer, increasing the importance ofthe experience the insurer offers the customer. Carriers must offerinformation and advice through channels of the customer's choosingand ensure an integrated experience on the customer's terms.

2) Insurers must alignbusiness models and technology to support a better customerexperience. Many insurers are spending vast sumsof advertising money to convince customers that insurance productsare simple, and can be bought simply. They are, essentially, tryingto move insurance out of the low-frequency, high complexitycategory into one that is higher frequency and lowercomplexity–more like buying a T-shirt and less like buying ahouse.

Additionally, retailers, internet giants and othernon-traditional competitors are starting to target the personallines insurance market. They have the potential to insertthemselves into the insurance value chain, monetizing their"traffic"–whether in person or digital–as well as their knowledgeof the customer to target relevant and personalized insuranceoffers.

Insurers must determine the appropriate business model to servethe needs of the customers they are targeting. They then need toensure that their business capabilities, technology, andorganization are aligned to consistently deliver differentiatedcustomer experiences that matter to their targeted customers.

3) Insurers need a broaderconcept of their business. Visionary insurersshould be prepared to conceptualize their business more broadly,building online communities and offering non-insurance services.They must also be willing to create ecosystems of partners whotogether can provide the total, personalized and convenientexperience today's customers expect. Some insurers may choose toexpand their role to offer a much wider customer experience,spanning new markets and new targets. 

Dissatisfied customers represent a huge risk to P&Cinsurers, but they also represent a tremendous opportunity. Onlycompanies that transform both their technologies and their businessmodels will be positioned to deliver the experiences theircustomers demand. These companies can then go to the next level,providing integrated customer experiences that address unmetcustomer needs rather than just providing products for them tobuy.