Insurers plan to invest $84 million, on average, over the next three years to improve their multi-channel distribution strategies, according to findings of a global survey of 125 insurers by Accenture.
The survey also indicates that insurers will shift investment priorities to mobile technologies, digital marketing–including social media such as Facebook–and channel integration over the next three years. While a limited number of insurers report their current investments are focused on creating mobile capabilities, improving digital marketing, and integrating channels (19 percent, 34 percent and 36 percent, respectively), a higher percentage of insurers are planning or considering investments in these areas for the near future (62 percent, 49 percent and 44 percent, respectively).
"Increasing investment in mobile capabilities–to take advantage of the growing use of smartphones–and in digital marketing, to create new opportunities to influence customer choice, is necessary, but not sufficient in today's environment," says Serge Callet, global managing director of Accenture's insurance practice. "Consumers are not simply replacing one channel with another, but are diversifying and using more channels than ever for all of their needs. The challenge facing insurers is to develop a distribution strategy that capitalizes on the strengths of each respective channel and that will allow them to match the right customers with the right products and services, at the right price, through the right channels."
(To learn more about distribution strategies in insurance, click here for this Tech Decisions article.)
According to the survey, insurers will tailor their marketing strategy to specific customer segments. More than one-quarter (26 percent) of insurers said they will customize their products, promotions, channels, services, and pricing strategies to specific customer segments in the next three years. The survey showed that only 14 percent of insurers currently tailor all of these activities by customer segment.
"Potential buyers of insurance are changing in numerous ways and their expectations of their providers are increasing steadily, as consumer-service leaders such as Amazon and Apple raise the bar for everyone," said Michael Costonis, executive director of Accenture's Insurance practice in North America. "Insurers are starting to realize that their products should be bought and not just sold. To do this they need to truly understand their customers, and to achieve a level of segmentation that is indispensable for moving from a product-centric to a solution-centric business model. The objective is to create a unique customer experience across all channels."
Among the survey's other findings:
? Nearly two-thirds of insurers (63 percent) do not consider their current distribution model as a source of competitive advantage.
? The emergence of new technologies was the most widely cited factor (85 percent) by insurers for making decisions to invest in distribution over the next three years, followed closely by changes in customer needs and attitudes (84 percent), new regulations (81 percent) and the increasing importance of advice in the distribution of insurance products (also 81 percent).
? Sixty-three percent of insurers said that all services — including quoting, underwriting, billing, claims declaration and account management — will be available online within the next three years; only 21 percent will have these services available on mobile devices within that time.
? Three out of four insurers (75 percent) said that developing relationships with "non-tied" channels (independent agents and brokers, and others) was a main priority, with nearly as many (73 percent) naming the development of specialized tools and sales support as a major focus.
? Two-thirds (66 percent) of insurers identified investment in training as a key priority for optimizing the performance of their captive sales force, with nearly as many (64 percent) identifying specialized tools and sales support, including information technology (IT), as their main priority.
? Aligning IT infrastructure with a defined distribution strategy was cited by 63 percent of insurers as a key challenge.
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