|[July 25, 2014]
UK Life Insurance Customers Prefer Buying Policies Online but Personal Touch is Important for Advice, According to Accenture Research
LONDON --(Business Wire)--
The most popular way to buy life insurance is now through digital
channels but customers still value face-to-face contact for financial
advice, according to the latest survey
of UK life and pensions customers conducted by Accenture (News - Alert) (NYSE:ACN).
According to the poll of 2,870 UK life and pensions customers, 38
percent of consumers purchasing life insurance in the last 12 months,
bought online. This included purchases through websites run by insurers,
independent financial advisors (IFAs) and banks. By comparison 33
percent bought policies in person and 22 percent completed transactions
over the phone.
The survey also reveals that a significant number of customers (19
percent) used price comparison websites to buy a life policy in the last
12 months. In addition, 41 percent of all customer interactions with
life insurance providers and 38 percent of interactions with pension
providers over the last 12 months were digital, including time spent
researching, buying and servicing products.
However, in-person meetings were the preferred way to conduct long-term
financial planning. Almost one-third of customers (30 percent) do their
planning in this way, and 43 percent would like to do so.
"Customers value the convenience and immediacy of digital channels and
they like to do their research and make comparisons online," said Peter
Kirk, managing director for Accenture Distribution and Marketing
Services in United Kingdom and Ireland. "But when it comes to making big
financial decisions, they still value face-to-face advice and prefer to
deal in person with a human being. The priority for insurers is to
enable seamless interactions across different contact points, whether
human or digital, and also guide consumers to the relevant channels for
IFAs still dominate, but life and pension providers have an
opportunity to fill the "advice gap" in a digital world
According to the survey, the most popular channel through which to buy
life and pension products was IFAs, which accounted for more than a
third (35 percent) of all policy sales in the past twelve months and 23
percent of these were bought in person. The survey also indicate that
IFAs are the channel where most consumers (72 percent) would turn to for
information and advice on retirement planning, followed by life and
pension providers (65 percent).
The survey also suggests there is still a big gap between those who
think they need advice and those who actually seek it. Forty-eight
percent of customers who feel they would benefit from information and
advice have never actually sought any professional advice or guidance,
and 51 percent of consumers without life and pension policies claim they
do not need any help with planning or managing their finances.
Peter Kirk said: "The need for financial advice appears to be benefiting
IFAs. Despite all the predictions about the impact of new regulations
such as the Retail Distribution Review, which means IFAs are now obliged
to charge fees rather than commission for advice, IFAs are still in
demand. However, over the next 12 months it will be interesting to see
how life and pension providers seize the opportunity to engage digitally
with customers that seem reluctant or unsure of how to seek information
Lack of consumer engagement across life and pensions market
Life and pension providers face low levels of engagement among customers
as the survey found that only 44 percent of customers are satisfied,
compared with 60 percent for current account banking, and only 21
percent were likely to recommend their provider compared with 40% for
current account banking.
Customers rank life and pensions providers lowest among all financial
companies when it comes to trust and how convenient they are to deal
with. Only 31 percent felt they could manage their policy in a way that
suited them, and 39 percent of customers agree strongly that products
are too complicated and unnecessarily confusing.
In addition, only 38 percent of customers said their life and pensions
providers offered value for money, and 37 percent indicated that their
insurer provided clear and transparent communications.
Peter Kirk said: "Life and pension providers need to up their game and
improve relationships with customers both by giving them the digital
convenience they want but also by finding ways of meeting customers'
desire for personal contact. Companies that fail to engage better with
customers risk being side-lined as financial utilities."
The research is based on online interviews with 2,870 UK life and
pension customers conducted in March 2014. The questionnaire probed
topics including the level of digital interaction, buying behaviour and
preferences, customer attitudes towards new and alternative sources of
advice and guidance, perceptions and behaviour shaping customers'
relationships with life and pensions providers; levels of customer
satisfaction; and savings behaviour. This research was part Accenture's
fifth study of almost 10,000 banking, motor insurance and life insurance
customers in the UK and Ireland, conducted simultaneously.
Accenture is a global management consulting, technology services and
outsourcing company, with approximately 293,000 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
Accenture helps financial institutions transform their customer
relationships through Accenture
Distribution and Marketing Services, a business service within
Accenture's financial services operating group, serving more than 100
institutions worldwide. Accenture Distribution and Marketing Services
combines Accenture's deep industry knowledge in banking, insurance and
wealth management with proven expertise in marketing, distribution and
innovation. It blends Accenture's management consulting, technology and
outsourcing capabilities - including its assets and expertise in digital
innovations, like analytics and mobile - to help institutions improve
growth and cost management through better customer relationships.
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