A study published by Accenture this year has insurance companies taking notice and changing the course. The study found that low customer satisfaction and heightened consumer expectations has led to a “Switching Economy” in the insurance industry which left $470 Billion in insurance premiums up for grabs in 2014. That’s billion – with a “B.”
Other notable findings were:
- Less than one-third (29 percent) of insurance customers are satisfied with their current providers
- 21 percent of customers believe that most insurance carriers are the same in terms of their products and services (This number increased from 14 percent in a similar survey conducted in 2013)
- Less than one in six customers (16 percent) said they would definitely buy more products from their current insurance provider
- One in four (23 percent) said they would consider buying insurance from online service providers, including technology giants
All factors combined paint a rather dismal image of insurance customer satisfaction. John Cusano, senior managing director of Accenture’s global Insurance practice, said in the study’s accompanying press release, “The study data indicates insurers are not keeping up with rising customer expectations, leading to increased customer dissatisfaction with insurance providers. This […] ‘switching economy’ threatens traditional insurers by giving the advantage to companies most successful at exploiting digital technologies.”
Insurers Are Altering Their Course
While the results came as a surprise to some, many insurance companies are already altering course in order to address the needs of this new breed of empowered consumer. A survey by Novarica placed “Digital/User Experience” as the second largest sector that insurance leaders are expected to spend their budget on in 2016, with most responses focused on “enhancing portals” and “improving internal user experience.” And it’s no wonder when 47 percent of survey respondents say they want more online interactions with insurers, and only 15 percent state that they are currently satisfied with their providers’ digital experience. With digital giants like Google taking interest in the industry, 59 percent of insurers note that without leaps forward in digital processing and data analytics they’ll be left in the dust.
While most insurance companies realize they need to adapt to consumers’ expectations for smooth, omnichannel experiences, almost half admit that they don’t yet have a realistic plan in place. In an effort to keep up with the times, the most forward thinking companies are turning to data solutions. Data-as-a-Service and marketing data companies offer opportunities to improve customer experiences with personalization and data mining and to find new customers for cross and up-sell opportunities. Big Data is quickly becoming an indispensable tool in delivering exceptional customer experiences, because it allows insurers an unprecedented opportunity to truly know their customers. With a better understanding of customers’ preferences, lifestyles, and other key characteristics, insurers can deliver highly relevant and personalized offers- which is imperative for the new era of customer centricity.
Quality data intelligence also opens the door for cross-sell and upsell opportunities. Many companies are using real time social indicators of states of change that indicate propensity to purchase. For instance, a new parent posting updates on social media channels and registering for baby showers is a prime prospect for a life insurance plan. Someone doing research to purchase their first home would also appreciate information on home owner’s insurance. By finding gaps in customer plans, and honing in on needs, insurers can intuitively provide a personalized consumer experience with relevant, targeted outreach.
A once antiquated industry, Insurance is realizing the need to keep pace with the rapidly evolving digital and customer centric landscape, especially as a growing number of tech-oriented start-ups and young firms enter the market. Big Data may be just what Insurers need to stay in the game, and see great success.
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