67% Of Consumers Willing To Buy Insurance From Banks Or Online Retailers
February 7, 2014 by Chris McMahon
A vast majority of insurance customers, 67 percent, are open to the idea of purchasing insurance products from companies other than insurers, according to a multinational survey byAccenture, a management consulting company. And 23 percent would consider buying from online service providers, such as Google and Amazon.
“Competition in the insurance industry could quickly intensify as consumers become open to buying insurance not only from traditional competitors such as banks but also from Internet giants,” saidMichael Lyman, global managing director for management consulting within Accenture’s Insurance industry practice. “Overall, there is a significant switching risk and we estimate that up to$400 billion in insurance premiums could change hands within the insurance industry over the next 12 months. The switching risk is important in western markets but even more so in emerging countries such asChina andBrazil, where insurance customers are even more likely to change providers.”
On the multiple choice survey, 43 percent of participants said they would consider buying insurance from banks, 23 percent from online service providers, 20 percent from home service providers, such as telecommunication or home security companies, 14 percent from retailers and 12 percent from car dealers,Accenture said.
Forty percent of those surveyed said they likely would switch auto or home auto insurers over the next year; 25 percent said they would likely cancel life insurance contracts and 35 percent said they likely would to take out a new contract with a new provider in the next 12 months. The top two reasons consumers would switch,Accenture said, are lower prices, cited by 87 percent, and more personalized service, cited by 80 percent; 41 percent said they would pay more for personalized advice when buying insurance.
“Personalization clearly emerges as a key driver in retaining existing customers and attracting new ones,” Lyman said. “Innovation in pricing strategy and the ability to make their customers feel that they are unique are thus critical to capturing share within the switching economy,” which offers opportunities for insurers to gain market share.
Most insurance customers, 67 percent, said they are interested in using mobile services, such as sending pictures of their car to report a claim or displaying proof of insurance, and 46 percent of mobile device owners have used tablets, and 37 percent have used smartphones, to communicate with their insurers. More than a third, 35 percent, of insurance customers said they would consider offering access to car-usage or lifestyle information if it could give them better value for their insurance coverage, Accenture said; 47 percent said it would depend on the information requested, and 18 percent said they were not comfortable doing so.
“While Internet access using personal computers or laptops was the first step in enabling customers to use digital channels, the real game-changer has been the growth in mobile,” Lyman said. “The mobile channel offers insurers the opportunity to take customer experience to the next level, enabling them to become partners of their customers’ everyday life by tailoring offers and interactions to the physical context, as location-based services can be highly relevant in insurance. For example, travel insurance-suggested offers can be sent to customers’ mobile phones when landing in an airport abroad, or a claim can be submitted from an accident scene with supporting photos. Also, as consumers become more open to providing access to their personal data, adoption of usage-based insurance enabled by telematics technology will accelerate.”
Other highlights from the report:
The online survey was designed by Accenture and conducted by Lightspeed Research in July 2013; 6,135 people participated, including 1,012 from the United States; 520 from Italy; 516 from Brazil; 512 from Japan; 511 each from the UK, France, Spain, Canada and South Africa; and 510 each from Germany and China, Accenture said.
