As much as $470 billion in life insurance and property and casualty (“P&C”) insurance premiums will be up for grabs globally as a result of declining customer loyalty and the perceived commoditization of products, according to a new report from Accenture.
The Accenture report, “Capturing the Insurance Customer of Tomorrow,” is based on Accenture's global consumer pulse research, which included more than 13,000 P&C and life insurance customers in 33 countries. The survey found that less than one-third (29 percent) of insurance customers were satisfied with their current providers. At the same time, the number of customers who believed that most insurance carriers were the same in terms of their products and services jumped 50 percent in the last year, to 21 percent in this year's survey from 14 percent in a similar survey last year.
Furthermore, less than one in six customers (16 percent) said they would definitely buy more products from their current insurance provider. In addition, only one in four (27 percent) had a high estimation of their insurance providers' trustworthiness, and nearly one in four (23 percent) said they would consider buying insurance from online service providers, including technology giants.
“Today's insurance customer is more empowered, more social, and has higher expectations of his or her providers,” said John Cusano, the senior managing director of Accenture's global insurance practice. “The study data indicates insurers are not keeping up with rising customer expectations, leading to increased customer dissatisfaction with insurance providers. This has created a 'switching economy,' which threatens traditional insurers by giving the advantage to companies most successful at exploiting digital technologies.”
Nearly half (47 percent) of the survey respondents said they want more online interactions with their insurers. In the past six months, half (49 percent) of P&C consumers purchased a policy online, with two in five (41 percent) using a mobile phone to make the purchase. The percentages were even higher for customers in emerging markets, with 57 percent of P&C consumers there purchasing a policy online, and more than two-thirds (69 percent) of those using a mobile phone to make that purchase. While many consumers globally were using online tools to purchase insurance products, only 15 percent said they were satisfied with their insurers' digital experience.
“Leading insurers realize the need to offer a broader range of innovative products and services and create a differentiated customer experience, which will likely require partnering with nontraditional players,” added Jean-Francois Gasc, the managing director of insurance at Accenture strategy in Europe, Africa, and Latin America. “As a result, traditional insurance providers face a stark choice: embrace digital and customer-centricity, or become a highly efficient manufacturing utility, leveraging capital and digital technologies to provide low cost insurance product manufacturing and servicing. Those who do neither are likely to lose out in this switching economy.”
Learn more: www.accenture.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].