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Thursday, 8 January 2015 01:45 - - {{hitsCtrl.values.hits}}
The level of consumer trust in insurance companies is lagging at just 70%, compared to 82% for banks, largely because of the low frequency of contact insurers have with their customers, according to EY’s 2014 Global Consumer Insurance Survey: Reimagining customer relationships, released recently. In fact, 44% of consumers report no communication from their insurer in the last 18 months. EY surveyed approximately 24,000 people in 30 countries to find out what matters most in the relationship customers have with their insurers, how they interact and how satisfied they are with the range of policy offerings. EY Global Insurance Customer Leader Graham Handy says: “We need to fundamentally rethink how the industry communicates. During the financial crisis trust in banks took a severe hit, but we have seen trust in banks recover while trust in insurers remains low. Banks have an established reason for regular interactions with their customers and, as a result, the ability to rebuild trust when it is lost. Insurers are relying on too few points of contact to build a trusted long-term relationship with their customers.” Trust in insurers is lagging, especially in mature markets Globally, 70% of consumers trust insurance companies, which is lower than the levels of trust in supermarkets (84%), banking (82%), car manufacturing (80%) and online shopping sites (78%). In mature markets — such as Europe (61%) and Australia (53%) — there are even lower levels of trust, but consumers in developing markets such as Latin America (81%) and the Middle East and India (79%) have more trust in their insurer. Consumers want more attention from their insurer Forty-four percent of survey respondents indicated that they had had no contact from their insurance providers in the past 18 months. But 57% of people would prefer to hear from their insurer more than once a year and 56% of consumers report having to proactively contact their insurance company. The survey found that the interactions between insurers and consumers currently occur so rarely that any one point of contact can significantly shift the perception of insurers and brokers in the consumer’s mind. When they do communicate the outcome is usually positive — globally, 70% of customers report a positive outcome from their interaction with insurers. Handy says: “These financial products do really matter at the end of the day, especially when customers have to call on them. Consumers want insurers to anticipate their key decision points for them and insurers need to recognise that just one point of contact at the right time can make a real difference. By delivering services beyond policies — such as timely information that promotes healthier living, safer driving or better financial outcomes — insurers have a real opportunity to transform consumer perceptions about the industry. However, they will have to get better with data in order to deliver this.” Very few in the industry are getting this right The ways in which insurers engage with consumers require significant attention. Consumers are far from delighted with outbound communications across all regions. Japanese consumers report the lowest level of satisfaction, with just 4% being highly satisfied. However, at the top end of the scale, insurers in North America and the UK are not performing that well either, with just 21% and 19% of their customer being highly satisfied respectively. Digital and remote channels are fast reaching parity with traditional face-to-face channels. In fact, 80% of customers – including 44% of seniors – would consider any proposed channel rather than in-person for all types of transactions and inquiries. Handy says: “It’s clear that insurers have yet to get ’direct-to-consumer‘ right in most markets. And even where there is a broker or an agent involved this doesn’t mean the customer is getting what they really need in terms of information. The insurance provider ought to be ensuring that all their customers receive this, regardless of whether they are served through a broker. With the rise of digital, insurers are increasingly better placed to do this – so the race is on to see who can do this most effectively, and most quickly.” Consumers still switch insurers based on price and want to know about promotions Consumers’ decisions are still motivated largely by price and material benefits. While the frequency and relevance of communication is a reason given for closing or replacing a policy, it is actually fourth in the list of priorities for consumers, with less than 30% of consumers citing it as a top reason for changing a policy. The cost/terms of the policy is the biggest reason for people closing or replacing their policy, with more than half of consumers citing this as a top reason, followed closely by policy benefits or coverage, and less closely by a recommendation from a broker or friend. This means that many customers who do switch insurers still retain overall positive views of their former provider – 38% of customers who were willing to recommend their provider to friends or relatives have closed their policy in the last 18 months. Handy says: “Insurers have traditionally devoted a lot of attention to new sales to new customers. Insurers have in the last few years started to devote more attention to retaining their existing customers. But the analysis suggests there is a third important group, ex-customers who left their insurer for a non-emotional reason (i.e., price point) and still hold them in high regard and who the insurer could win back.” One way of winning customers back is perhaps through deals and promotions. Fifty-nine percent of global insurance consumers want to hear about promotions and special deals from their insurer more than once a year, but today, only 45% receive that level of contact. In global developing markets, the gap is even starker: 49% of consumers would prefer to receive information on promotions more than once a year, but just 29% of consumers receive this level of contact.
