|[February 06, 2014]
Insurance Customers Would Consider Buying Insurance from Internet Giants, According to Accenture's Global Research
NEW YORK --(Business Wire)--
Two-thirds (67 percent) of insurance customers would consider purchasing
insurance products from organizations other than insurers, including 23
percent who would consider buying from online service providers such as
Google and Amazon, according to new research by Accenture (News - Alert) (NYSE:ACN)
based on a survey of more than 6,000 insurance customers in 11 countries.
Forty-three percent of respondents, who could select multiple responses,
said they would consider buying insurance from banks, almost one-quarter
(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.
"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," said Michael
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 as China and Brazil, where insurance
customers are even more likely to change providers."
The research shows that loyalty in insurance is a key issue, with 40
percent of consumers likely to switch to another automobile or home
insurance provider over the next 12 months. In the life insurance
market, one-quarter (25 percent) of respondents said they were likely to
cancel an existing contract and more than one-third (35 percent) said
they were likely to take out a new contract with a new provider in the
next 12 months.
Lower prices and more personalized service are the top reasons for
consumers to switch to a new insurer, cited as important or very
important in switching decisions by 87 percent and 80 percent,
respectively, of the insurance customers surveyed. Forty-one percent of
respondents said they were willing to pay more to get personalized
advice when purchasing their insurance.
"The switching economy represents a huge opportunity for many insurers
to gain market share," said Lyman. "Personalization clearly emerges as a
key driver in retaining existing customers and attracting new ones.
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."
Insurance customers are open to providing access to their personal
The research also reveals that two-thirds (67 percent) of consumers are
interested in mobile insurance services - such as sending pictures of
their car to report a claim, or displaying their proof of insurance on
their mobile phone - while less than half (46 percent) of the
respondents that are mobile device owners have already used their
tablets, and 37 percent their smartphones, to deal with their insurers.
Also according to the survey, more than one-third (35% percent) of
insurance customers are open to provide access to their usage or
behavior information - such as car-usage or lifesyle information - if
this can give them better value for their insurance coverage. Almost
half (47 percent) of the respondents said it would depend on the
information requested and only 18% 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," said Lyman. "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
Chinese and Brazilian customers are the least loyal
The research indicates that Chinese and Brazilian insurance customers
are the least loyal and the most interested in digital services:
Chinese, Brazilian and British insurance customers are the consumers
most likely to switch providers, with 81 percent, 75 percent and 57
percent of respondents, respectively, saying they are likely to switch
to another automobile or home insurer over the next 12 months. At the
other end of the spectrum, Canadians (23 percent), Japanese (24
percent) and French (24 percent) are the most loyal customers.
Chinese, Brazilian and British insurance customers are also the most
interested in purchasing insurance online, with 93 percent, 83 percent
and 81 percent, respectively, of respondents expressing such interest.
Chinese, Brazilian and South African consumers have the most appetite
for new mobile-enabled insurance services, with 94 percent, 88 percent
and 85 percent, respectively, of respondents saying they are
interested in new mobile services that their insurers might offer.
Chinese, Brazilian and South African consumers are paying the most
attention to comments and recommendations posted on social media
before selecting insurance providers, with 86 percent, 82 percent and
60 percent of respondents saying that they would consider these
comments in making their insurance-buying decisions.
Chinese, Japanese and Brazilian customers are the most open to give
access to their usage or behavior information to optimize their
insurance coverage, with 94 percent, 89 percent and 87 percent,
respectively, of respondents saying so.
"Only those insurers with the digital capabilities and flexible
operating model to adapt effectively to the changing demands of
customers will be able to attract the large number of customers who are
set to leave their less farsighted providers," said Lyman. "Visionary
insurers must also be prepared to conceptualize their business more
broadly, building online communities and offering non-insurance services
- such as USAA helping its customers buy cars - and be willing to create
ecosystems of partners who together can provide the total, personalized
and convenient experience today's customers expect."
Among the survey's other findings:
More than two-thirds (71 percent) of consumers surveyed would be ready
to buy insurance online, such as travel and assistance policies,
extended warranty, home insurance or life insurance products.
More than half (54 percent) of respondents are interested in gaming
solutions that insurers may offer to help them better manage risk
coverage and lower premium rates.
Almost half (48 percent) of respondents said they would consider
comments on social media in making their insurance-buying decisions.
Examples of innovative insurance services
The research cites the following examples of insurers that are taking
advantage of digital innovation to offer customers better prices and
more relevant services, including services outside of their traditional
U.S. insurer Progressive has launched "Name Your Price" - an
online tool that collects basic information from prospective
customers, including their auto insurance budget, recommends a package
that matches this budget, and then allows the customer to adjust the
price, adding or removing insurance features to create a tailored
package that achieves the best balance of suitability and
A different approach to making auto insurance affordable and
personalized is telematics technology, which is increasingly being
offered by the UK online carrier Insurethebox. Customers buy
miles of coverage in advance. They then allow their car usage to be
monitored by an onboard device, and top up their insurance when their
miles run low. They are rewarded with bonus miles for safe driving,
and for purchasing any of a wide variety of goods from the insurer's
ecosystem of retail partners. Retention is strengthened by the
customers' perception that their insurance is priced specifically for
them, as well as by the appeal of the loyalty program.
USAA helps its members buy cars - they simply state what type
of car they are looking for, options they want, where they live, and
the insurer's certified dealer network will send back quotes as well
as closest points of sales. USAA also guarantees lowest prices by
refunding members the difference if they find the car at a lower price
within four days of purchase. This approach implies deep flexible
business and operating models that enable the insurer to keep on
innovating the member experience.
Accenture commissioned a survey of 6,135 owners of life and/or auto and
home insurance policies in 11 countries. The online survey was designed
by Accenture and conducted by Lightspeed Research in July 2013. The
6,135 respondents included 1,012 from the U.S., 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 is a global management consulting, technology services and
outsourcing company, with approximately 281,000 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$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page
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