How to Reimagine Ties With Customers

Building on the inaugural 2012 insurance consumer study, the 2014 EY survey asked 24,000 individuals in 30 countries about their relationships with insurance providers, and what matters most across the lifecycle. Their answers show that customer-centricity has never been more important across the global industry -- and that insurers have considerable work to do in developing stronger, mutually beneficial relationships. The time has come for insurers to engage fully in all of their customer relationships and find new ways to deliver value to their customers. Key Numbers

• Only 14% of customers are very satisfied with current outbound communications from insurers.
• 44%  of customers have had no interactions with their insurers during the last 18 months.
• 80% of customers are willing to use digital and remote channel options for different tasks and transactions.

Key Findings

1. High turnover and low trust signal serious relationship issues. Insurers are less trusted than banks, supermarkets, car manufacturers and online shopping sites. The survey results also reveal that far more insurance consumers actually switch insurers than express an intention to switch — an almost unprecedented finding in market research.
2. Just because they leave you doesn't mean they don't love you. Traditional notions of loyalty and advocacy don't necessarily apply to insurance consumers. "Advocates" are not necessarily loyal, meaning that "likelihood to recommend" metrics are largely irrelevant. That "alumni consumers" may be open to purchasing new policies in the future underscores the need for deeper, more detailed customer intelligence across segments.
3. Insurers have so few interactions with their customers that each one becomes a moment of truth. Consumers have so few interactions with their insurers that even the simplest administrative tasks can become a "moment of truth" that shift the perception of insurers or brokers in the consumers' minds. How insurers perform in these instances can lead directly to coverage increases and new policy sales.
4. Consumers want more frequent, meaningful and personalized communications. A full 57% of global insurance consumers, across all product types, prefer to hear from their providers at least semi-annually. Today, only 47% receive that level of contact. In an era when many consumers feel bombarded by push communications and suffer from information overload, it is particularly interesting for survey respondents to express a desire for more communications.
5. As consumers embrace digital, insurers must rethink their distribution strategies and partner relationships. While consumers still gravitate toward traditional contact methods, digital and remote options are fast reaching parity for a range of tasks and inquiries. No matter their precise distribution strategy and service models, insurers need to offer consumers the right mix of channels to maintain healthy relationships — and prepare to manage the potential channel conflict that is likely to result.

The Right Response for Insurers

1. Long-term market success begins with stronger, deeper customer relationships.
2. Insurers must take more responsibility for the health of all customer relationships, regardless of distribution channel.
3. Insurers must master both product and customer experience design.
4. Advanced analytics will define the market-leading insurance enterprise of tomorrow.
5. There is an opportunity for insurers to become true risk mitigation partners, in addition to quantifying and pricing risk.

For the full report, click here.