[August 04, 2015] |
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$470 Billion in Insurance Premiums Up for Grabs Due to Declining Customer Loyalty and Perceived Product Commoditization, According to Accenture Report
As much as $470 billion in life insurance and property & casualty
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 (News - Alert) (NYSE:ACN).
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The Accenture Strategy report - Capturing
the Insurance Customer of Tomorrow - is based on Accenture's Global
Consumer Pulse (News - Alert) 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 are satisfied with their
current providers. At the same time, the number of customers who believe
that most insurance carriers are 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) has 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/her providers," said John Cusano, senior
managing director of Accenture's global Insurance practice. "The study
data indicates insurers are not keeping up with rising customer
expectations, leading to increasd 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 are 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 are using online tools to
purchase insurance products, only 15 percent said they are 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, managing director, Insurance,
Accenture Strategy, 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."
Methodology
The Accenture Global Consumer Pulse Research is an annual project that
assesses consumer attitudes toward the customer experience - including
marketing, sales and customer service practices - and consumers'
behaviors in response to companies' practices. For the most-recent
report, Accenture surveyed more than 23,000 respondents, including 6,521
P&C insurance customers and 6,507 life insurance customers in 33
countries. The survey was conducted via the Internet in 2014. The
findings quoted in this report combine the responses from the P&C
insurance customers and the life insurance customers.
About Accenture
Accenture is a global management consulting, technology services and
outsourcing company, with more than 336,000 people serving clients in
more than 120 countries. Combining unparalleled experience,
comprehensive capabilities across all industries and business functions,
and extensive research on the world's most successful companies,
Accenture collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page
is www.accenture.com.
Accenture Strategy operates at the intersection of business and
technology. We bring together our capabilities in business, technology,
operations and function strategy to help our clients envision and
execute industry-specific strategies that support enterprise wide
transformation. Our focus on issues related to digital disruption,
competitiveness, global operating models, talent and leadership help
drive both efficiencies and growth. For more information, follow
@AccentreStrat or visit www.accenture.com/strategy.
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