Latest Insights on Customer Behavior - Insurance Thought Leadership

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September 14, 2021

Latest Insights on Customer Behavior

Summary:

Increasingly, people no longer view insurance as a transaction – instead, they see insurance as a part of their overall financial wellbeing.

Photo Courtesy of Pexels

The pandemic, civil unrest, economic uncertainty and severe weather have created uneasiness and changed consumers’ attitudes and behaviors. To help agents and brokers succeed in today’s current marketplace, Chubb sought to understand how these events have affected the consumer mindset. Our research shows that prospective clients are feeling vulnerable and anxious and are more aware of the current risks they face. 

In addition, successful families and individuals are no longer viewing insurance as a transaction – instead, they  are expecting more from the insurance-buying process and now see insurance as a part of their overall financial wellbeing, especially in a world that is increasingly turbulent. 

For the full research guide, click here. Further key findings are outlined below.

Changed Perceptions

Our research highlighted the negative emotional effects created by recent events, including an increased uncertainty and vulnerability about the future.

In fact, 80% of insurance consumers agree that current events in the world have altered their feelings about risk, and they are more aware of the risks they face than they were a year or two ago. Nearly half of respondents say their insurance purchasing decisions were affected by the need for increased security, concern for the future and an increased awareness of perceived risks.

Yet, as insurance buyers are becoming more conscious of their risks, we’re seeing a new paradigm shift on how they are thinking about insurance agents and brokers. 

See also: How Well Did Agents Cope With COVID?

Old Paradigm Vs. New Paradigm

The old paradigm involved clients interacting with agents and brokers when in need of a new policy or a renewal, and the focus was on the products and carrier alternatives—and pricing. However, the new paradigm now involves clients having a heightened awareness of the risks they face. Equally important, clients and prospects know they need insurance, but now they are looking for solutions and approaches to prepare for an uncertain future, to help secure their overall financial well-being. In addition, they expect their agent or broker to understand their needs as well as their concerns.   

With this new way of thinking, agents and brokers have an opportunity to recognize clients’ emotional needs in the insurance-buying process and to build trust and communicate how insurance can play a stabilizing factor in uncertain times. In fact, according to our survey, when making these insurance-purchasing decisions, 73% of insurance consumers want expert, personally tailored options and 70% want guidance to the best products and services. 

Forming Personal Connections

According to the study, successful individuals and families want their agents and brokers to personally engage with them. Clients and prospects agree that their insurance agent could provide service beyond their expectations by explaining how they can protect themselves from different risks (83%). Furthermore, clients also expect to speak to their agent or broker on the phone at least once during a crisis (92%).

The research also showed that clients and prospects are looking for transparency, which may come in the form of initial and continuing reviews, explanations of coverage details and agent/broker accessibility. Moreover, clients want engagement with their agent or broker to guide them through the insurance process, be a partner in the decision making and express empathy and understanding in their interactions. In other words, emotions come into play during the insurance-buying process—like other direct sales interactions.   

Emotion-Based Selling

The practice of an emotion-based client experience is important in the consumer segment of insurance. Agents and brokers have the opportunity to differentiate themselves by truly educating clients about insurance, how insurance will respond in the event of a claim and what to expect. For example, consumers not only have existing perceptions about insurance products (e.g., homeowners, auto liability and valuables), but their emotions affect their insurance buying behaviors. Thus, it’s important for agents and brokers to connect with their clients to understand their emotional attachment to the assets they are insuring.

Consider homeowners insurance: Rather than speaking to the client about their home in terms of year built, square footage and type of roof — all important details to take in to secure coverage — agents and brokers may want to take the conversation a step further and discuss why the client chose that home or neighborhood. Is it in the best school district? Does it have historic craftmanship or an in-law suite because aging parents are moving in? These important details help the agent or broker establish a deeper connection with clients and understand what’s important — that way, agents and brokers can advise on the best insurance coverages to meet client needs. 

See also: Post-Pandemic: 4 Tips for Independent Agents

To learn more about how the pandemic and other recent events have altered clients’ views of risk and how agents and brokers can continue to build their business by providing an emotion-based client experience, visit: http://www.chubb.com/clienttruths.

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About the Author

Mary Parsons is executive vice president, sales and distribution leader, Chubb Personal Risk Services.

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